Multinomial Lattice Method to Determine Stock Prices on Blockchain

Abstract

This research investigates the integration of the multinomial lattice method with blockchain technology to enhance the determination of stock prices, particularly for European-type Asian options, aiming to improve market transparency, security, and efficiency. The study employs a documentary research approach, reviewing existing literature on the multinomial lattice method and blockchain technology. The researcher organizes and interprets findings to provide a comprehensive summary. The application of the multinomial lattice method allows for the calculation of Asian call option prices by considering key parameters such as the strike price, interest rate, and share value. Implementing this method on the blockchain facilitates decentralized management of stock option contracts, enhancing transparency and security in price determination. The research relies on existing literature and lacks empirical data to validate the findings. Future studies could explore real-world applications and effectiveness in various market conditions. The findings suggest that combining these technologies can improve corporate governance and stakeholder trust in financial markets. The research relies on existing literature and lacks empirical data to validate the findings. Future studies could explore real-world applications and effectiveness in various market conditions.