Binomial Trees: One-Step & Two-Step Pricing
This lesson is part of the course
In this lesson
You price a European call with a one-step and a two-step binomial tree using the risk-neutral probability.
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Lessons in this course
- Forward & Futures Pricing: Cost of Carry Locked
- Option Payoffs & Profit at Expiry Locked
- Strategy Payoffs: Covered Call, Protective Put, Spread & Straddle Locked
- Put-Call Parity: Check & Arbitrage Direction Locked
- Binomial Trees: One-Step & Two-Step Pricing Locked
- Black-Scholes: Pricing a Call & a Put Locked
- The Greeks: Delta, Gamma & a Simple Delta Hedge Locked
- Implied Volatility: Backing Out σ from a Market Price Locked