A Toy Model of Financial Markets
نویسندگان
چکیده
Several techniques of fundamental physics like quantum mechanics, field theory and related tools of non-commutative probability, gauge theory, path integral etc. are being applied for pricing of contemporary financial products and for explaining various phenomena of financial markets like stock price patterns, critical crashes etc.. In this paper, we apply the well entrenched methods of quantum mechanics and quantum field theory to the modeling of the financial markets and the behaviour of stock prices. After defining the various constituents of the model including creation & annihilation operators and buying & selling operators for securities, we examine the time evolution of the financial markets and obtain the Hamiltonian for the trading activities of the market. We finally obtain the probability distribution of stock prices in terms of the propagators of the evolution equations. c © Electronic Journal of Theoretical Physics. All rights reserved.
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