An American options lattice is a graphical representation used to model the pricing of American-style options, which can be exercised at any time before expiration. This method provides a structured way to analyze the potential future movements of the underlying asset's price and allows for the valuation of options by considering multiple paths and exercise opportunities. The lattice approach is particularly useful for American options because it captures the flexibility of early exercise, a key feature that differentiates them from European options.
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