THE BASIC MATHEMATICAL THEORY FOR OPTION PRICING IN FINANCIAL MARKETS AT DISCRETE AND CONTINUOUS TIME.

This article covers the basics of the mathematical theory of pricing of options in financial markets; where we show that, it is possible to build a multi-period multinomial discrete model any time step Δt and any duration. The model describes the stochastic differential equations which includes the movements of parameters and the volatility; which in general, is also a very random processes folded nature. [ABSTRACT FROM AUTHOR]