Pricing European Options Based on a Logarithmic Truncated <i>t</i>-Distribution

The t-distribution has a “fat tail” feature, which is more suitable than the normal probability density function to describe distribution characteristics of return on assets. difficulty using price European options that fat tail can lead deviation in one integral required for option pricing. We use called logarithmic truncated options. A risk neutral valuation method was used obtain pricing model with t-distribution.