On nonparametric predictive inference for asset and European option trading in the binomial tree model

This article introduces a novel method for asset and option trading in a binomial scenario. This method uses nonparametric predictive inference (NPI), a statistical methodology within imprecise probability theory. Instead of inducing a single probability distribution from the existing observations, the imprecise method used here induces a set of probability distributions. Based on the induced imprecise probability, one could form a set of...