Iam new to options trading, I want to go through statistical approach to understand about market behaviour. Guys can you suggest statistical software and books for it?
Hamilton and Tsay are the go to textbooks. The former is more detailed, the latter more applied. Hayashi is the best to introduce GMM estimation imho. Read up on MCMC, which was also used heavily by Rentec according to [Nick Patterson](https://www.thetalkingmachines.com/episodes/ai-safety-and-legacy-bletchley-park) (the whole podcast starts at 16:40, Rentec starts at 29:55 – a sentence before that is helpful),
Generally though, going down that path will usually require formal education, quite a bit of experience, and access to proper data, not just yahoo finance and the like. Therefore, if you are serious about this, go to university, and start working at firms that trade options.
Looking at Quant SE answers is quite useful if you just want to get some basic ideas. They frequently contain the theory and code. Some examples:
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option volatility & pricing. enough stats to haunt you.
How do you think that should work if you don’t know what software to use and what book to read?
https://quant.stackexchange.com/a/38872/54838 has a thorough list of books, including stays and programming that is needed for quantitative finance.
Hamilton and Tsay are the go to textbooks. The former is more detailed, the latter more applied. Hayashi is the best to introduce GMM estimation imho. Read up on MCMC, which was also used heavily by Rentec according to [Nick Patterson](https://www.thetalkingmachines.com/episodes/ai-safety-and-legacy-bletchley-park) (the whole podcast starts at 16:40, Rentec starts at 29:55 – a sentence before that is helpful),
Generally though, going down that path will usually require formal education, quite a bit of experience, and access to proper data, not just yahoo finance and the like. Therefore, if you are serious about this, go to university, and start working at firms that trade options.
Looking at Quant SE answers is quite useful if you just want to get some basic ideas. They frequently contain the theory and code. Some examples:
– [time decayed z-score](https://quant.stackexchange.com/a/74229/54838)
– [why and when to use log](https://quant.stackexchange.com/a/64041/54838)
– [unit roots, unit circle and stationarity](https://quant.stackexchange.com/a/65776/54838)
– [forward exchange rates, optimal predictor, ergodic stationarity and GMM estimation: replication of ](https://quant.stackexchange.com/a/77651/54838), which replicated [Bekaert and Hodrick (1993)](https://ideas.repec.org/a/eee/jimfin/v12y1993i2p115-138.html)….
Humans make the market move so stats are all but worthless . . .
Lol, statistical approach to determine human behaviour? Impossible.
Options pricing model would be good to study.