In this comprehensive video, we delve into the intricacies of the Binomial Option Pricing Model, an essential tool for traders and financial analysts to value options. Starting with an introduction to the model, we guide you through constructing a riskless portfolio, calculating the number of long shares, and estimating portfolio value. Learn how to calculate the implied value of a call option, determine probabilities of market moves, and finally discuss the Binomial Option Pricing Model applications to real-world scenarios. Whether you're a beginner or an expert in finance, this video serves as a complete walkthrough for understanding and utilizing the Binomial Option Pricing Model effectively.
🎓 *Get 25% Off CFA Courses (Featuring My Videos!) — Use code RYAN25 here:*
👉 https://ryano.finance/cfa
📈 *See Why I Recommend This Broker For Options:* https://ryano.finance/ibkr-options
Chapters:
0:00 - Introduction to the Binomial Option Pricing Model
2:09 - Constructing a Riskless Portfolio
4:10 - Calculating the # of Long Shares in Portfolio
6:35 - Calculate Portfolio Value in 1 Year
8:13 - Calculate the Implied Value of a Call Option
9:17 - Calculate Probabilities of Up & Down Moves
11:40 - Value Call Option Using Binomial Option Pricing Model
12:24 - Value Put Option Using Binomial Option Pricing Model
14:02 - The Binomial Option Pricing Model in the Real World
*Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.