Lian Ying-ying
Abstract
The defect of binomial parameter model for option pricing in current use is analyzed in this article.A new binomial parameter model is constructed using the idea of moment in probability thoery.The new model can aviod negative probability and has higher calculating accuracy.Therefore,it can be applied to various options pricing.
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The defect of binomial parameter model for option pricing in current use is analyzed in this article.A new binomial parameter model is constructed using the idea of moment in probability thoery.The new model can aviod negative probability and has higher calculating accuracy.Therefore,it can be applied to various options pricing.
Key concepts: Binomial (polynomial), Binomial options pricing model, Binomial distribution, Valuation of options, Negative binomial distribution, Econometrics, Trinomial tree, Moment (physics)