Options Pricing Model

Overview

This project involves building models to price options using two well-known methods: the Black-Scholes method and the Binomial option pricing model. The project utilizes various Python libraries for numerical computation and data visualization.

Features

• Black-Scholes Method: Implements the Black-Scholes formula for pricing European call and put options.
• Binomial Option Pricing Model: Implements the Binomial tree model for pricing American and European options.

Importance

• Financial Analysis: Provides accurate pricing of options, which is crucial for traders and financial analysts in making informed investment decisions.
• Risk Management: Helps in assessing the risk and potential returns of options, allowing for better hedging strategies.
• Educational Value: Serves as a practical implementation of theoretical models, aiding in the understanding of option pricing mechanisms.

Project Structure

• black_scholes.py: Script to calculate option prices using the Black-Scholes method.
• binomial_option.py: Script to calculate option prices using the Binomial option pricing model.
• README.md: Project documentation.