AmericanPutPriceBinomial {Dowd} | R Documentation |

## Binomial Put Price

### Description

Estimates the price of an American Put, using the binomial approach.

### Usage

```
AmericanPutPriceBinomial(stockPrice, strike, r, sigma, maturity, numberSteps)
```

### Arguments

`stockPrice` |
Stock price of underlying stock |

`strike` |
Strike price of the option |

`r` |
Risk-free rate |

`sigma` |
Volatility of the underlying stock and is in annualised term |

`maturity` |
The term to maturity of the option in days |

`numberSteps` |
The number of time-steps in the binomial tree |

### Value

Binomial American put price

### Author(s)

Dinesh Acharya

### References

Dowd, Kevin. Measuring Market Risk, Wiley, 2007.

Lyuu, Yuh-Dauh. Financial Engineering & Computation: Principles, Mathematics, Algorithms, Cambridge University Press, 2002.

### Examples

```
# Estimates the price of an American Put
AmericanPutPriceBinomial(27.2, 25, .03, .2, 60, 30)
```

[Package

*Dowd*version 0.12 Index]