The binomial model is one of the simplest and most intuitive lattice methods. At any point in time the underlying asset price can change to one out of only two possible values. Loosely speaking, in any period the asset price can move either up or down.

A number of different binomial implementations exist, with small differences between them. The classic model of Cox, Ross and Rubinstein (1979).

For example, over a (small) time interval

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Superbly illuminating data here, tahkns!