Binomial Tree Option Pricing: Replication in 5 Simple Steps
Replication is the single most important idea in derivatives pricing, and it can be demonstrated exactly with secondary-school arithmetic. This post prices…
no-arbitrage pricing
Forwards, Futures and Swaps: Derivatives You Can Price With Arithmetic
Forwards, futures and swaps dominate global derivative volume, and all three can be priced with a yield curve and arithmetic. This post…