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binomial tree and finite difference method
Hi all. I'm very curious: what's the point of binomial tree when you can have fdm, especially for simple contract like American vanilla option? I understand binomial tree is a special case of explicit fdm, and binomial method can only find option price for one underlying price. It seems there's no big advantage of using binomial tree (besides it's easier to understand). however, a lot of software implements binomial tree in production code, and there's quite a lot of academic paper written on improvement of binomial. So I wonder if I completely missed the point?