O'Reilly logo

Derivatives and Risk Management by Sundaram Janakiramanan

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

15

The Binomial Options Pricing Model

LEARNING OBJECTIVES

After completing this chapter, you will be able to answer the following questions:

  • What is meant by the binomial model for options pricing?

  • What is meant by no-arbitrage options pricing?

  • How to calculate the price of a call option using single-period, two-period, and multi-period binomial models?

  • How to calculate the price of a put option using single-period, two-period, and multi-period binomial models?

  • How to calculate the price of a call and a put option on stocks that pay dividends using binomial models?

  • How to calculate the price of an American call and an American put option using binomial models?

BOX 15.1 Binomial Options Pricing Models Used to Value Employee Stock Option ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required