  We consider option pricing using replicating binomial trees, with a two fold
purpose. The first is to introduce ESG valuation into option pricing. We
explore this in a number of scenarios, including enhancement of yield due to
trader information and the impact of the past history of a market driver. The
second is to emphasize the use of discrete dynamic pricing, rather than
continuum models, as the natural model that governs actual market practice. We
further emphasize that discrete option pricing models must use discrete
compounding (such as risk-free rate compounding of $1+r_f \Delta t$) rather
than continuous compounding (such as $e^{r_f \Delta t})$.
