Binomial Option Pricing: With Examples

How do you price options? How does binomial option pricing work? This video covers binomial option pricing, and provides simple examples of pricing a call and a put.

#Options #Derivatives #Binomial

[WhisperingPages-rskw]

you made it so easy I can't believe that put 3 hours in this concept and you explain it this concept in 10 min thank you so much

[TheExceptionalState]

Super clear! Thank you. My guess (as a teacher) is that you are still close enough in time to remembering how difficult it was initially so that you could describe it without over-complicating it. Well done :)

[kentvandervelden]

Prof. Mark, this is fantastic! Please consider doing more of these lecture-style videos, which are useful and evergreen. Especially if your main audience if the population of retail investors without formal finance training. Like health, finance is so poorly taught to the masses, despite the subject's huge importance to success of the individual. I suspect you've seen the slick videos that sway people to spend large sums on options courses promising guaranteed returns. Just feel there's a lot you could to education people so they can protect themselves.

[renaldiprima]

I don't usually comment on Youtube.
But your explanation is great.
Keep up the good work!

[giannapunzalan]

YOU ARE MY HERO!!! Thank you soooo much for this! I'm working on a take-home midterm and had NO IDEA how to tackle the pricing for the put option because my prof didn't even go over it in his online lectures o_O You should replace my professor, I'm not even kidding haha Thanks again!!!!

[shivasisdash]

Awesome 👍 now I am ready for exam.thanks...

[ankitpingale]

Best explanation I have come across...

[emreyetim]

What is the 1.1 on 6:30 4th step can you tell me please ?

[venkatsandra]

Great explanation!
Complexity untangled. No nonsense.
Also post a video on Monte Carlo simulation model.

[nnnyin]

Thanks for the video you made. How come 6:51 we are using 1/3stock price minus the option call price but not plus that, as my understanding, when we short-call, we are taking profit from selling the option isn’t it?

[dominiqueceramella]

Your video is great! This really helped me to see/understad the difference between the call and put calculation. Thanks :-)

[kongzilla]

I didn't understand from 5:00 .. What actually is that upstate payoff? and why is that 10 subtracted?

[adventures]

What takes my professor 3 1 hour lectures in college takes you 10 minutes to explain perfectly. Some professors should be fired.

[seankimkim]

how did you determine the hedge portfolio with just the hedge ratio? ie, how did you know to short a call and buy a stock with the hedge ratio of 1/3?

[wolfgangi]

What is the difference between what you've gone through in the video compare to the binomial tree valuation method?

[meiqiyang]

you make my day. it is so so so so clear and easy to understand.

[Alexanderify]

will the call and put value always be the same in most occasions?

[hcamry]

How is it possible to buy 1/3 of a stock ??

[hankmoody]

Seems like a great video, but this is confusing as fuck to me as a person who haven't had any finance subjects before. Need to watch it a couple of times to let it sink in.

[bitanyagebremichael]

you're a legend! God bless you, in the name of the Lord Jesus Christ, I pray thankfully. Amen. You really provided clarity to me :)