The trinomial option pricing model, proposed by Phelim Boyle in 1986, is considered to be more accurate than the binomial model, and will compute the same results, but in fewer steps.

Considerations The use of Trinomial models are popularized due to their ability to converge faster than binomial models. Essentially they take a shorter time to achieve a given accuracy.

The purpose of this course is to (a) develop the students' computational skills, and (b) introduce a range of numerical techniques of importance to financial engineering. The course starts with the ...

Investors can use binomial and trinomial trees as an alternative to the Bjerksund-Stensland model. Trees are considered “numerical” methods, whereas Bjerksund-Stensland is considered an ...

The aim of this article is to present an efficient semi-analytic lattice methodology for derivatives pricing, as an alternative to and improvement on standard recombining binomial and trinomial trees.

Use it when multiplying a binomial by a trinomial, as students did in the above example, and it’s as though the middle term of the trinomial never existed. So, how can we prevent such confusion?

Illustrations are given for inferences about trinomial probabilities, and for inferences about a monotone sequence of binomial p i. Finally, some comments are made on the general class of models which ...