ONSOTI, Alex Nyong'a

ONSOTI, Alex Nyong'a

Student Bio

Onsoti Alex Nyong’a was born in Nyamira County, Kiabonyoru Ward, Mokomoni Sublocation, Emboye Village on 7th January, 1989. Member of the Seventh – Day Adventist Church. EDUCATION He attended her primary education is various schools such as Emboye Primary (1994 – 2002), Monire Primary (2002 – 2004) and Kamurgiuywa Primary (2005). In his secondary education, attended Sigot Secondary School (2007 – 2009) and Lelmokwo Boys’ High School (2010). Obtained the undergraduate Bachelor of Science in Actuarial Science degree from Meru University. Second class Honors (UPPER DIVISION) (2012 – 2016). Later (2018 – 2020), joined the University of Nairobi Postgraduate MSc. Actuarial Science. Recently finished a Master’s project at the University of Nairobi titled European Option Pricing Using Truncated Normal Distribution. Currently working towards publishing academic journals about the topic and fostering to joining the Actuarial professional bodies. CAREER AND PROFESSIONAL ACTIVITIES: Industrial attachment at Times U Sacco (Nov 21st 2014 – Feb 21st 2015) attached to the Loans Department.


  • Fluent in Microsoft Packages 
  • Skilled in statistical software, e.g. SPSS, R

Project Summary

Project Title: European Option Pricing Using Truncated Normal Distribution

Project Abstract

Option trading is one of the activities that take place in the financial market. Pricing these option is key for investor to ensure that the position they take offers good returns. The Black & Scholes model is widely used in pricing option although its underlying assumptions are inconsistent with the market dynamics. Some studies have been done aimed at improving the Black & Scholes model and in general the pricing of option. In this paper, we take the same motive but now use the truncated normal distribution instead of the normal distribution that has been used in previous studies. Under the truncated normal distribution, denoted by TND in this paper, the underlying asset’s log-return of is assumed to be bounded below and above. The boundary values are determined by the investor’s perceived realistic price ranges of the underlying asset. The basic statistics of the proposed model are derive. The martingale restriction and closed formulas for option pricing as well as the pricing error are presented. The put - call parity and duality and some of the Greeks are also formulated. From the numerical result of the study, the proposed model performs better than the classical Black & Scholes at different price ranges for European options.