# Binary_BOPM: Binary option valuation vialattice tree (LT) implementation In QFRM: Pricing of Vanilla and Exotic Option Contracts

## Description

Compute option price via binomial option pricing model (recombining symmetric binomial tree)

## Usage

 ```1 2``` ```Binary_BOPM(o = OptPx(Opt(Style = "Binary")), Type = c("cash-or-nothing", "asset-or-nothing"), Q = 1000, IncBT = FALSE) ```

## Arguments

 `o` `OptPx` object `Type` Binary option type: `'cash-or-nothing'` or `'asset-or-nothing'` `Q` A fixed amount of payoff `IncBT` TRUE/FALSE, indicates whether to include the full binomial tree in the returned object

## Value

original `OptPx` object with `Px.BOPM` property and (optional) binomial tree IncBT = FALSE: option price value (type double, class numeric) IncBT = TRUE: binomial tree as a list (of length (o\$n+1) of numeric matrices (2 x i). Each matrix is a set of possible i outcomes at time step i columns: (underlying prices, option prices)

## Examples

 ``` 1 2 3 4 5 6 7 8 9 10 11 12 13``` ```(o = Binary_BOPM())\$PxBT o = OptPx(o=Opt(Style='Binary')) (o = Binary_BOPM(o, Type='cash', Q=100, IncBT=TRUE))\$PxBT o = OptPx(Opt(Style='Binary'), r=0.05, q=0.02, rf=0.0, vol=0.30, NSteps=5) (o = Binary_BOPM(o, Type='cash', Q=1000, IncBT=FALSE))\$PxBT o = OptPx(o=Opt(Style='Binary'), r=0.15, q=0.01, rf=0.05, vol=0.35, NSteps=5) (o = Binary_BOPM(o,Type='asset',Q=150, IncBT=FALSE))\$PxBT o = OptPx(o=Opt(Style='Binary'), r=0.025, q=0.001, rf=0.0, vol=0.10, NSteps=5) (o = Binary_BOPM(o, Type='cash', Q=20, IncBT=FALSE))\$PxBT ```

QFRM documentation built on May 2, 2019, 8:26 a.m.