Completeness 224The binomial asset pricing inthis section is calledcomplete becauseevery derivative can be replicatedby trading in the underlying stockand the money market.
In a complete market, every security has a unique price.
Many markets are incomplete, and prices cannot be determined from no-arbitrage considerations alone. Utility based models are still the only theoretically defensible way of treating such markets.
Derivative securities: Options - Binomial asset pricing model