could be the Vega on the vanilla get in touch with; ∂ σ ∂ K displaystyle frac partial sigma partial K
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C = C n o s k e w − V e g a v ∗ S k e w displaystyle C=C_ mathrm noskew -mathrm Vega _ v *mathrm Skew
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Therefore, the worth of the binary get in touch with is the detrimental from the derivative of the cost of a vanilla contact with respect to strike cost:
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