Down Transition Probability

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Definition: Down Transition Probability

Down Transition Probability
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Full Definition of Down Transition Probability

A measurement using one of two pricing models of the likelihood that the underlying asset of an option will decrease during a specific period of time. A binomial pricing model weighs the probability of a decline against the probability of an increase while a trinomial model considers the probability of the price staying the same.

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https://payrollheaven.com/define/down-transition-probability/
Modern Language Association (MLA):
Down Transition Probability. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
April 20, 2024 https://payrollheaven.com/define/down-transition-probability/.
Chicago Manual of Style (CMS):
Down Transition Probability. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/down-transition-probability/ (accessed: April 20, 2024).
American Psychological Association (APA):
Down Transition Probability. PayrollHeaven.com. Retrieved April 20, 2024
, from PayrollHeaven.com website: https://payrollheaven.com/define/down-transition-probability/

Definition Sources

Definitions for Down Transition Probability are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.