OPT_BS

OPT_BS

Synopsis

OPT_BS(call_put_flag,spot,strike,time,rate,volatility [,cost_of_carry])

Description

OPT_BS uses the Black-Scholes model to calculate the price of a European option using call_put_flag, call_put_flag, 'c' or 'p' struck at strike on an asset with spot price spot.

time is the time to maturity of the option expressed in years.

rate is the risk-free interest rate.

volatility is the annualized volatility, in percent, of the asset for the period through to the exercise date.

cost_of_carry is the leakage in value of the underlying asset, for common stocks, this would be the dividend yield.

  • The returned value will be expressed in the same units as strike and spot.

Examples