Binomial Option Pricing Model Explained | CFA Level 2

The binomial model is a fundamental method for valuing options in CFA Level 2 Derivatives. In this video, we explain how a one-period binomial tree is used to price both call and put options.

In this lesson, you’ll learn:
✅ How a one-period binomial tree models possible stock price movements
✅ What risk-neutral probabilities are and why they are used in option pricing
✅ How to calculate the value of a call option using the binomial model
✅ How to calculate the value of a put option
✅ Why the binomial model is consistent with no-arbitrage pricing principles

This explanation is taken from our CFA Level 2 on-demand course, where derivatives are taught with clear intuition and step-by-step exam application.

📚 Gain full access to my CFA Level 1 tuition and revision course at https://www.stoynov.co.uk.

📚 Due to popular demand, we are now also expanding into CFA Level 2. Find the latest uploads on our website.

LinkedIn: https://www.linkedin.com/in/mstoynov/
CFA 1 Newsletter: https://www.stoynov.co.uk/newsletter

#binomialModel
#derivatives
#cfalevel2
#cfaprep
#cfacourse

Видео Binomial Option Pricing Model Explained | CFA Level 2 канала Martin Stoynov