Volume no :52, Issue no: 1, July (2018)

THE PRICING MODEL OF THE BARRIER OPTION UNDER THE TRINOMIAL TREE

Author's: Zhikai Yan
Pages: [21] - [33]
Received Date: April 14, 2018; Revised July 5, 2018
Submitted by:
DOI: http://dx.doi.org/10.18642/jmsaa_7100121957

Abstract

The establishment of the trinomial tree model provides a convenient way to pricing the options, comparing to the binary tree, it has the advantage of higher accuracy and feasibility. In this paper, based on the trinomial tree model, we are researching the pricing model of the barrier options, we can obtain a new model to pricing the barrier options, and this model can be a valid way to pricing the barrier options.

Keywords

the barrier option, the trinomial tree, the price of option.