Cox-Ross-Rubinstein discretisation of GBM on a recombining lattice: at each step the price moves to Su or Sd with u = e^σ√(Δ t), d = 1/u, risk-neutral probability p = (e^rΔ t - d)/(u - d). American options priced by backward induction with max(continuation, exercise) at each node. Converges to BSM at rate O(1/n), accelerated by Richardson extrapolation; trinomial extension gives better convergence and natural extension to interest-rate trees (Hull-White).