Stock options can be a useful tool in any investor’s portfolio. They allow the skilled investor to increase their leverage and possibility for a higher payout with less risk. However, they are only beneficial if the investor knows how to use them, and if they accurately reflect the price of the option. This presentation hopes to offer some insight into the binomial method of options pricing along with new adjustments to the model in hopes of reflecting a more accurate options price. This, along with the Monte Carlo simulation presented, will hopefully offer some insight into the mathematical investor’s toolbox.
Hinson, Ryan and Schroeder, Chris, "An Exploration In The Tools Of Options Pricing - Data" (2021). 2021 Celebration of Student Scholarship - Oral Presentations. 50.