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I found learning about the binomial model to be particularly good at establishing intuition about option pricing. Nowadays it's considered a toy model but it ma
by pjacotg 3y ago
I found learning about the binomial model to be particularly good at establishing intuition about option pricing. Nowadays it's considered a toy model but it makes the ideas of a replicating portfolio and risk neutral probabilities very clear with nothing more than basic high school math.