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Valuing Options – European and American using Binomial Pricing Model

By Shailendra, FRM, CQF December 25, 2023Python Code

Pricing European Put Option # Pricing European Put Option import numpy as np import matplotlib.pyplot as plt def binomial_option_pricing(S, K, T, r, sigma, n, option_type): delta_t = T / n…

The Binomial Option Pricing Method Simplified

By Shailendra, FRM, CQF December 25, 2023Options

Introduction The binomial options pricing model (BOPM) provides a generalizable numerical method for the valuation of options which is based on a discrete-time framework, dividing time into a number of smaller intervals. The…