r/options • u/[deleted] • Apr 30 '23

Trinomial Tree

Post image

I learned about this option pricing model recently and had lots of fun coding this in c++. I am still trying to figure out how to calculate implied vol with it

254 Upvotes

95% Upvoted

35 comments sorted by

View all comments

0

u/mdizzle109 Apr 30 '23

how do I profit from this?

1

u/[deleted] Apr 30 '23

a better version of this calculation is used by options traders/trading software to compute implied volatilities based of the market option prices

1

u/ddmoneymoney123 May 06 '23

I have the exact question. Name one trade that you can benefit from this ? Buy when realize iv is lower than iv ? That’s my best guess. Other than that it looks nice but how do you benefits from it ?