Hi All,I am new to this forum and I came here with a mission!!I need to make a studie on the differents options pricing models, showing all their pros and conts. I tought of working with BS, Binomial, Trinomial and MC.Can anyone help me with anything on this subject?Thanks in advance! Best Regards.

Hi mahfuz,In fact BS is a model ; binomial, trinomial and MC are ways of implementing. "BS" alone doesn't tell you how to price your options (except for vanilla options with closed formulas)."binomial" or 'trinomial" alone doesn't tell you which model you're using (you can use basic CRR which is akin to BS, or more complicated stuff : local or stoch vol...). "MC" could be any model, really.So you first need to clarify something : what exactly is it that you're willing to compare ? different models or different implementations of the same model ?

Hi mate! Thanks for your fast answer.The problem is the following I want to compare these models while pricing:- European or American - Plain Vanilla or Single Barrier- Call or PutMy study is to analise all the facts about pricing this options while using:-BS-Binomial-Trinomial-MC (Using Brownian Motion)Thanks!

I don't think you quite follow what moltabile was saying. Firstly, you need to decide what your underlying process is. This might be just geometric brownian motion with constant volatility and drift, or it might be something more complex.Secondly, you need to decide what your instrument is - eg european or american, vanilla, barrier, etc.Only then can you ask yourself how you'll price it. On the whole, I'd rather split it into Analytic, PDE, Monte Carlo.Now, if you're saying "black scholes", it is confusing because this is stating all three - the underlying process, the instrument (european call or put) and the method (analytic).