# Markov Property

*Quant & Pricing — Finicade finance glossary*

The Markov property says the future depends only on the present state, not on the path that led there. It's what makes models computationally tractable — you can price on a recombining tree or a low-dimensional grid instead of tracking every history. It's also the formal statement behind weak-form market efficiency, and the reason path-dependent options like Asians and lookbacks need extra state variables to price.

**Also known as:** Markov process, memoryless property, Markov chain

**Related terms:** [Random Walk](https://finicade.com/glossary/random-walk), [Stochastic Process](https://finicade.com/glossary/stochastic-process), [Brownian Motion](https://finicade.com/glossary/brownian-motion), [Path Dependence](https://finicade.com/glossary/path-dependence), [Market Efficiency](https://finicade.com/glossary/market-efficiency)

Source: https://finicade.com/glossary/markov-property