Use this financial calculation for a transparent scenario, ratio, valuation, pricing, or cash-flow estimate when all amounts, dates, rates, and compounding conventions are defined consistently.

Spot price

Required number input.

Strike price

Required number input.

Time to expiration (years)

Required number input.

Risk-free rate (%)

Required number input.

Dividend yield (%)

Required number input.

Annualized volatility (%)

Required number input.

Option type

Required string input.

Tree steps

Required integer input.

Estimate an American call or put with a Cox-Ross-Rubinstein binomial tree and report the premium over the same tree without early exercise; convergence depends on the chosen step count. The tool evaluates the supplied inputs together and returns the named outputs below; it does not infer omitted operating conditions or change the units shown.^[1]

American option price

The resulting american option price returned as a number.

European binomial price

The resulting european binomial price returned as a number.

Early-exercise premium

The resulting early-exercise premium returned as a number.

• Option values depend on contract terms and model assumptions for volatility, rates, dividends, exercise, barriers, monitoring, discretization, and underlying dynamics. Black–Scholes and small trees can misprice early exercise, jumps, smiles, path dependence, and illiquid contracts.
• Use finite inputs in the displayed units and preserve more precision than the final presentation requires. Independently verify safety-critical, financial, compliance, or production decisions.

Test multiple scenarios, reconcile rates and cash-flow dates, retain full precision, and verify contractual, tax, market, and accounting inputs with current primary documents or qualified advice.

• Bermudan Option Binomial Calculator

  Estimate a Bermudan call or put with a Cox-Ross-Rubinstein tree, allowing early exercise only at selected tree steps plus expiration; results depend on the exercise schedule and discretization.

• Barrier Option Binomial Calculator

  Estimate a discretely monitored up-and-out or down-and-out European option with a Cox-Ross-Rubinstein tree; barriers are checked only at tree dates, so results depend on the step count.

• European Option Black-Scholes Calculator

  Price a European call or put with the Black-Scholes-Merton model using continuous rates and dividend yield; the model assumes constant volatility and exercise only at expiration.