Lattices are commonly used in valuing bond options, Swaptions, and other interest rate derivatives In these cases the valuation is largely as above, but requires an additional, zeroeth, step of constructing an interest rate tree, on which the price of the underlying is then based. The next step also differs: the underlying price here is built via "backward induction" i.e. flows backwards from maturity, accumulating the present value of scheduled cash flows at each node, as opposed to flowing forwards from valuation date as above. The final step, option valuation, then proceeds as standard. See aside.