Options Pricing Models | Binomial (Two & Multi-Period
When the formula is applied to these variables, the resulting figure is called the theoretical fair value of the option. Pricing models used by the market. There are two main models used in the Australian market for pricing equity options: the binomial model and the Black Scholes model. Option Pricing Models . Before venturing into the world of trading options, investors should have a good understanding of the factors determining the value of an option.
Read more