# Option Pricing using Binomial Trees – Course Outline

The benefit of this methodology over the conventional approach is that it allows for the extension of a simple 3 step tree to a 50 – 100 step option pricing tree in a few minutes. This is not only a more efficient approach to binomial trees but the increased number of time-steps ensures greater accuracy in most cases of option pricing. The course begins with the pricing of plain vanilla European calls and put options; then is followed with the pricing of American options and finally with the pricing of Knock out and Knock in (Sudden Death) exotic options.

# Course Prerequisites

Familiarity with derivative products and comfortable with basic mathematics, numbers and EXCEL.

# Course Audience

The course is targeted at intermediate and advance users and is aimed at professionals who deal with pricing, valuation and risk issues related to structured fixed income and foreign exchange transactions.

# Course Guide

Here is the structure of the course.

Title |
Duration |
||

Session 1 – Theoretical Overview of Derivatives and their Payoffs |
32:20 mins | ||

Session 2 – Option Pricing using the Conventional Binomial Tree Approach |
28:14 mins | ||

Session 3 – Option Pricing using the Efficient Tree Approach |
16:04 mins | ||

Session 4 – Pricing American Options & Exotics using the Efficient Binomial Tree Approach |
14:56 mins | ||

Session 5 – Increasing time steps and improving result accuracy using the Efficient Binomial Trees Approach |
10:16 mins | ||

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