Binomial Option Pricing Part 1

[WillTheHoff]

I'm in my final year of my undergraduate degree, and one of my modules is Futures and Options. The entire term has been a desperate panic and a struggle, I have understood about 5% of the material so far.

Then I discovered your videos and they have literally saved my degree, I owe you my life Ronald Moy. I don't know who, or where you are, but you are my personal saviour and I thank you emphatically and repeatedly.

Your explanations and illustrations are a thousand times more intuitive and cogent than the entire Exeter University Business School, who are all mindless incompetents.

Thanks man, you are the best.

[Lusawana]

This was really insightful. Possibly the best explanation on binomial pricing I've seen. Thank you. Much appreciated.

[MrDavidBradfield]

Man, you explained this so clearly. Thank you.

[tosinbabasola]

Please, I will so glad if you can also make a video on how Hermite polynomial works in option pricing .

[ankitkhatri]

while writing the expression for buying the underlying and writing a call option, why value c is taken with a negative sign? As a writer of the call option I would receive this amount from the call buyer, so shouldn't we take c with a positive sign?

[sergiikurylo]

Hi, at first I must say it was a really great explanation. But could you please explain once more why do we have "-" in this equation V=hS - C. Why do we have to substract C from hS? thx

[robin]

In this example, the value of c changes with Sd and Su, in the real world, how do you know the Value of Sd and Su, if not, how do you calculate the value of c?

[natarajanramachandran]

A doubt..How are we equating Vu = Vd ?? How is the value of portfolio at upstate and downstate equal ?

Kindly let me know