Determination of Stock Option Prices using the Trinomial Hull and Black Scholes Methods on Apple Inc. Corporation

Abstract

The rapid development of asset buying and selling transactions makes investors want an investment that can minimize financial risks. This is the background for the introduction of derivative instruments. One of the widely used derivative products is stock options. There are various types of stock options used in the capital market, including European Options which consist of Call Options and Put Options. To determine the price of European options, several methods are used. Among them are the trinomial method and the Black Scholes formula. This study aims to calculate the price of European Call and Put options using the trinomial method and Black Sholes on Apple Inc. stocks with Matlab software. The results show that the trinomial method has a convergent nature to the Black Scholes model for both Call Options and European Put Options.