How does replication help price a derivative?
Replication prices a derivative by matching its future payoff with a portfolio whose current cost can be observed or computed.
Suppose a derivative and a portfolio have the same payoff in every relevant future state. If markets are arbitrage-free, those two positions should have the same value today after financing is handled correctly. If the derivative trades above the replication cost, it looks expensive. If it trades below the replication cost, it looks cheap.
The replication portfolio is not merely a shortcut. It is the reason the fair price exists.
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