Implied Trinomial Tree Setup

Propagate implied trinomial equity tree

The implied trinomial tree (ITT) model is a framework for pricing equity options that extends the traditional binomial tree model by incorporating a trinomial structure. This model allows for three possible price movements at each node in the tree: an upward movement, a downward movement, and a stay-at-the-same price movement. Setup an ITT options tree model using the following functions:

Functions

`itttimespec`	Specify time structure using implied trinomial tree (ITT)
`itttree`	Build implied trinomial stock tree
`stockoptspec`	Specify European stock option structure

Topics

Understanding Equity Trees
Financial Instruments Toolbox™ supports five types of recombining tree models to represent the evolution of stock prices.
Pricing Equity Derivatives Using Trees
Pricing functions calculate the price of any set of supported instruments based on a binary equity price tree, an implied trinomial price tree, or a standard trinomial tree.
Use treeviewer to Examine HWTree and PriceTree When Pricing European Callable Bond
This example demonstrates how to use treeviewer to examine tree information for a Hull-White tree when you price a European callable bond.

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