The Cox-Ross-Rubinstein binomial model is a discrete-time numerical method you use to price contingent claim financial derivatives such as European options, American options, and exotic options with nonstandard structures.
Binomial model option pricing generates a pricing tree in which every node represents the price of the underlying financial instrument at a given point in time. You can use this pricing tree to price options with nonstandard features such as path dependence, lookback, and barrier events. For more complex structures, it is better to use Monte Carlo simulation-based option pricing, because it is less computationally intensive.
Leading financial institutions use MATLAB to build and calibrate option pricing models such as the binomial model. MATLAB toolboxes such as those for finance and financial instruments support derivatives modeling tasks, enabling you to:
Pricing Derivatives Securities with MATLAB 44:00 (Webinar)