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Options pricing using Binomial trees – Building an efficient option pricing spreadsheet in Excel

This course focuses on an alternative method of implementing a two-dimensional binomial tree compared to the traditional method of building a binomial tree in excel presented in most option pricing text books.   The alternate approach is based on the techniques documented by Professor Mark Broadie at Columbia Business School as part of his coursework in Security Pricing and Computational Finance courses at Columbia University and allows us to extend a simple 3 step tree to a  50 – 100 step option pricing tree in a few minutes.

The course starts with pricing European calls and put options, followed by pricing american options and closes by reviewing option pricing for Knock out and Knock in (Sudden Death). We also review the special case of a down and in option.

Options pricing – Using binomial trees to price options in a spreadsheet
Options Pricing – Pricing Call Options – Option pricing spreadsheet – Binomial trees
Options Pricing – Pricing American Options – Calls and Puts – Spreadsheet implementation – Binomial trees
Options Pricing – Pricing Put Options – Option pricing spreadsheet – Binomial trees
Options pricing–Exotics Options–Pricing a Capped Call–Excel implementation – Binomial trees
Options pricing – Pricing Knockout exotic options – Sudden Death Options – Down and out call options
Options Pricing – Binomial Trees – Pricing Sudden death Options – Down and in call options

If you would like to purchase and download the excel examples covered in this course, please checkout our online finance course store for our pdf course download and example excel spreadsheets and templates.

If you are beginner and would like to see more details about Options and Derivatives or Options pricing, please see the following product oriented courses available for free.

Options Crash Course for dummies
Options & Derivatives Products
Advance Options & Derivatives Crash course
Options Pricing reference

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