# A simple comparison between Skorokhod & Russo-Vallois integration for insider trading

## TL;DR

This paper compares Skorokhod and Russo-Vallois integrals in a simplified insider trading model, finding that the forward integral offers more meaningful financial insights than the Skorokhod integral.

## Contribution

It provides a clear comparison of two anticipating stochastic calculus methods in the context of insider trading modeling, highlighting the practical advantages of the Russo-Vallois forward integral.

## Key findings

- Forward integral yields meaningful financial results.
- Skorokhod integral is unsuitable for this insider trading model.
- Russo-Vallois integral aligns better with financial intuition.

## Abstract

We consider a simplified version of the problem of insider trading in a financial market. We approach it by means of anticipating stochastic calculus and compare the use of the Skorokhod and the Russo-Vallois forward integrals within this context. We conclude that, while the forward integral yields results with a clear financial meaning, the Skorokhod integral does not provide a suitable formulation for this problem.