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Standard Trinomial Tree Setup

Propagate standard trinomial equity tree

The standard trinomial tree (STT) is a binomial-like framework used for pricing equity options that extends the traditional binomial tree model by incorporating three potential price movements at each node: an upward movement, a downward movement, and a horizontal movement (no change in price). Setup a STT equity options tree model using the following functions:

Functions

stttimespecSpecify time structure for standard trinomial tree
stttreeBuild standard trinomial tree

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