Definitions for "Binomial theorem"
The theorem that gives the terms of the expansion of a binomial expression [eg. (p+q)] raised to a particular power n [eg. (p+q)^n].
For all possible integers and numbers and , or, equivalently, [ Precalculus and Discrete Mathematics, UCSMP, p. 612
a theorem giving the expansion of a binomial raised to a given power
Is used as a 'risk-neutral' basis to value options, the underlying security can only go up/down until the option expires.