Thus we propose that the simple binomial model with constant n is a useful simplification of what is likely to be a more complex process.

However, for most practical pricing models, such as a binomial model, this is not the case and vega must be derived numerically.

Given a probability space , consider a single-period binomial model.

For these reasons, various versions of the binomial model are widely used by practitioners in the options markets.

Other generalized linear models such as the negative binomial model or zero-inflated model may function better in these cases.

For example, the binomial model allows the incorporation of changes in the risk posed by the underlying stock.

The resulting negative binomial model is fitted to empirical data from several retrieval tests.

Wilson and Room developed a binomial model that incorporates Taylor's law.

A negative binomial model has also been proposed.

For vanilla options, as the number of steps increases, the results rapidly converge, and the binomial model is then preferred due to its simpler implementation.