Finance Theory — 12.2: Risk-Neutral Option Pricing скачать в хорошем качестве

Finance Theory — 12.2: Risk-Neutral Option Pricing

Two traders disagree on whether a stock will go up or down — yet they arrive at the exact same option price. This video builds a one-period binomial model from scratch to show why real-world probabilities cancel out of option pricing entirely, and how replication and no-arbitrage arguments replace forecasting with financial engineering. Key concepts covered: • Binomial option pricing model with a concrete numerical example (S₀ = $20, strike = $15) • Replicating portfolios: matching option payoffs with stock and bonds • Why the real-world probability p never enters the pricing formula • Risk-neutral probabilities (θ) as a mathematical pricing tool, not a market belief • The equilibrium condition d ‹ r ‹ u and why both assets must coexist • Arbitrage enforcement: how mispricing creates riskless profit opportunities • The conceptual bridge from binomial trees to Black-Scholes ORIGINAL SOURCE This video is based on content from the following source:    • Ses 12: Options III & Risk and Return I   All credit for the original educational content belongs to the original creator.