OPT_GARMAN_KOHLHAGEN

OPT_GARMAN_KOHLHAGEN

Synopsis

OPT_GARMAN_KOHLHAGEN(call_put_flag,spot,strike,time,domestic_rate,foreign_rate,volatility[,cost_of_carry])

Description

OPT_GARMAN_KOHLHAGEN values the theoretical price of a European currency option struck at strike on an asset with spot price spot.

call_put_flag is 'c' or 'p' to indicate whether the option is a call or a put.

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

time the number of days to exercise.

domestic_rate is the domestic risk-free interest rate to the exercise date.

foreign_rate is the foreign risk-free interest rate to the exercise date, in percent.

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 as the rate of change of option value, per 100% volatility.

Examples