Risk-Neutral Skewness and Kurtosis: See this post for R code to calculate model free implied volatility. Let stock price return for period is given by: (1) The price of the volatility contract: (2) The price of the cubic contract: (3) The price of the quadratic contract: (4) Define : (5) For -period model-free implied volatility (MFIV) is: (6) […]