KOSPI 200 Index Futures and KOSPI 200 Index Option are used as risk management tools as well as instruments to develop a new financial management product combined with other financial assets. Risk is the key consideration in management or investment and is measured by volatility. For this reason, it is critically important to predict the volatility of KOSPI 200 Index Option in option pricing and investment strategies. There are two widely used methods in measuring the option price; historical volatility using actual prices from the past and implied volatility predicting the value reflecting the current events. However, present option pricing may need to reflect the implied volatility that has been evaluated by the market already and therefore, if the market is efficient, implied volatility must be a good indicator for realized volatility. Since the global financial crisis that caused worldwide credit crunch lasted for an extended period with extreme volatility, this study separated the analysis period into the pre-crisis

In this study the characteristics of REITs in Korea were investigated. REITs has been introduced and managed for almost 15 years in Korea. The research results show that K-REITs has higher return and lower risk structure than KOSPI, and higher return and higher risk than bond. These results indicate that we can attain portfolio effects by including REITs in an investment set. Regarding the correlation between return of K-REITs and that of stock and bond is smaller than that of the case of the U. S., which means there is possibility to attain more portfolio effects in Korea than the U. S. using REITs. Also the systematic risk of K-REITs is near zero. And alike from that of U. S., the asymmetric risk and return structure according to the market condition of K-REITs is not found. So if an investor analyzes the volatility of real estate market and the unique characteristics of REITs exquisitely and includes the REITs in his/her portfolio accordingly, he/she can achieve reduced risk and improve portfolio effects. In short, K-REITs can be very useful to diversify the investment and attain portfolio effects in the financial market.