@annieyang4420
The most understandable content of this topic in just 15min after viewing so many similar. I saw most of your video was published 2 yrs ago and saw you started to publish new video lately, keep up working on it you are great! Have subscribed to your channel and looking forward more great stuff!
@Adz-i4l4u
Undergrad student in my final year. I must say, I haven't seen a better explanation of the binomial model anywhere. I really respect the enthusiasm you have for teaching; my professors could learn a thing or two :)
@Revelcember
Back then I was taught some arbitrary method to derive P and 1-p and determine the option price in Binomial Model. Although the mentioned method was easy, it lacked logic and therefore was forgettable. You explained this method very Logically and succinctly. Now I can’t forget the derivation, even if I want to. Thanks for the video😁
@harshvardhanranvirsingh9473
Perfect Timing! I was actually reading the Risk Neutral Valuation in a 2-period binomial model! Once again great video! Looking more like these!
@dinkysniff
This is a really cool video and a nice explainer on the binomial model. If anyone watching this is confused how Δ was calculated as 0.25 it might be helpful to have a further explanation because it assumes the viewer understands how to simplify the equation - in that case then it might be helpful to understand the steps; It's explained that it's needed to find the value of Δ that makes the portfolio riskless. The portfolio consists of a long position in Δ shares and a short position in one call option. We can see in the first step it's demonstrated that 102Δ -1 = 98Δ (you can also express as; 102Δ - 98Δ = 1) You can simplify this equation to 4Δ = 1 (because difference between 102 & 98 is 4) Finally, you can solve for Δ by dividing both sides of the simplified equation by 4, which gives; Δ = 1/4 = 0.25
@riccardoformenti4332
Keep up this math inclined videos, the best content you’ve published by far
@tanchienhao
Best explanation on options pricing! Especially the part where you emphasise that the probability doesn’t matter, we are trading volatility not the stock!
@chamanthawickramarathne2029
Actually, you explain everything in an easy-to-understand way. Keep it up.👍
@Leshic2
Excellent.. Wow.. Outstanding to have somebody of your experience, sharing options and trading from this perspective. Thank you. (here after seeing your interview a week ago) By the way, I love how you presented it with the phone call. Excellent. I had to watch it a 2nd time and frequently skipped back to better grasp points. (our minds often wander when listening...)
@alexanderlapanowski3866
I really appreciate this video. I worked through all of Shreeve Volume 1, and a part of Volume 2, and I was a bit worried that the Binomial Asset Pricing model was too easy or simple to be used in practice. I'm glad that some experienced quants/strats think that it's worthwhile.
@king199324
The bit where you answered the call and decided to write an option lol. awesome video. thanks for sharing!
@alilawati87
You are gifted! I was struggling to understand Shreve’s book. Your explanation is awesome. Now what about including interest rate in the model.
@kevw5473
This was such a great clear explanation and your passion for teaching is so apparent. You make an amazing teacher!
@beelineunitel
I really enjoyed the way you explained it! Something I wasn’t able to fully understand before watching your video! :) I wanted to mentioned one thing that I find perplexing: The calculation of the stock EV is not correct, which in turn - makes it appear as if the option is miss priced at the 0.40 level. 0.40 level for the option is actually a correct level because the stock spot should be trading at $99.6 and not $100 (40%*102+60%*98) *assuming zero rates etc etc.
@jongxina3595
Really good video! Especially for a beginner like me. Thanks!
@nicolumps8362
This is the clearest explanation I have ever seen, thank you!
@LouLouMagou
Thanks, very informative and love the humour! :)
@dianaluna2263
That was sooo good. Super clear and lovely to watch. Thank youuuu
@hedwards4599
This was very impactful. You & the whiteboard gave me a better understanding. However, I'll need to watch this video a 2nd time because it is a complex d
@PerfilievFinancialTraining