Binomial Tree

A yes-no, up-down, high-low case representation for outcomes, usually as applied to the investing in derivative securities.

Like..."if IBM's quarter is good, then the call option is likely worth x; if IBM's quarter is bad, then the call option is likely worth x over 100."

The whole idea behind a binomial tree is to try and simplify an otherwise ungodly set of difficult-to-mathematically-model outcomes that really should be done by robots. Or at least computers. The tree thing just means that there's usually a physical drawing or representation of the potential outcomes.