The effect of block size selection on financial markets

Risk has become an important factor of financial market that is why today we need different risk management tools to analyze the financial risks in advance. Every business has routine risk or term risks, which they face either every day or during financial term. Companies are trying to protect themselves by taking precautionary measures in advance so they can manage their businesses against any future risks. Due to the increase of competition and to expand the business risk management has gain importance in the business sectors. In global competition or for growing, it is clear to see that institutions are paying much more importance to the risk management. In addition, General Extreme Value Theory is one of the most useful technic to guess of extreme cases, which has the big effect, but less possibility to understand the risk and on behalf of managing likelihood of encounter. It has been tried to calculate a harm's possibility and reach to the best estimate can be faced in the future. It has been observed that the block size selection of estimates made in previous studies has been used randomly without relying on any assumption, and it is necessary for applications to find a certain block size and not be a method or marker that can be used for all. By studying the research done in the literature, with the help of the extreme value theory, it is possible to reach the best estimation without calculating the selected minimum / maximum value according to the block size. By taking into account the risks associated within this study, they will be able to find out in what conditions and in what way they will be able to manage them. In this study, it has been mention about Block Maxima problem which is the most important approach in General Extreme Value. Information has been given about General Extreme Value and application area of this theory, also the technics about the estimate of the parameter. In the different markets to understand the compability of the methods Istanbul Stock Exchange (BIST 100), in the global stock markets the most transactions NIKKE, DOW, SOXX's indexes are used. Keywords: Extreme Value Theory, General Extreme Value Distribution