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 Nov24 awarded Tumbleweed Nov18 answered Relation between IV and SD Nov17 asked FX Delta Conventions Sep30 awarded Explainer Jul12 comment Prove that the binomial algorithm implies the arbitrage free price at t=0 of a T-claim Usually you write $E^Q[V_i]$ to denote the expectation under the martingale measure, if it is not clear from the context. Jul12 comment Prove that the binomial algorithm implies the arbitrage free price at t=0 of a T-claim Yes, exactly! A naive version of total expectation is usually introduced in a first class in probability theory. See Wikipedia for more info, if you're interested: en.wikipedia.org/wiki/Law_of_total_expectation Jul11 answered Prove that the binomial algorithm implies the arbitrage free price at t=0 of a T-claim Jul4 answered Which is the correct definition of arbitrage? Jul4 awarded Commentator Jul4 comment Inconsistent Definition of Arbitrage in Bjork? @BCLC: Yes, it should be >0. Thanks for pointing that out! Since they are definitions they cannot be right or wrong. However the second one makes more sense, and is the one most commonly used in the literature. Jul4 revised Inconsistent Definition of Arbitrage in Bjork? edited body Jul4 comment Inconsistent Definition of Arbitrage in Bjork? @KaapstadKwant: Thanks for pointing out my error! Jul4 comment Inconsistent Definition of Arbitrage in Bjork? Hello BCLC, I corrected my answer since the first one was incorrect. Jul4 revised Inconsistent Definition of Arbitrage in Bjork? Corrected an incorrect answer Jul4 answered Inconsistent Definition of Arbitrage in Bjork? Jul4 revised Inconsistent Definition of Arbitrage in Bjork? Added details to avoid confusion! Jul4 suggested approved edit on Inconsistent Definition of Arbitrage in Bjork? Jul3 comment Self-financing and Black-Scholes-Merton formula @emcor: It was a typo, S instead of B. Now everything is correct, right? Jul3 comment Self-financing and Black-Scholes-Merton formula @athos: Acctually it only applies to simple European derivatives i.e. with payoff $Y= h(S(T))$ due to the Markov assumption. "Your" method is much more general! Jul3 revised Self-financing and Black-Scholes-Merton formula edited body