OPT_FRENCH

OPT_FRENCH theoretical price of a European option adjusted for trading day volatility

Synopsis

OPT_FRENCH(call_put_flag,spot,strike,time,ttime,rate,volatility,cost_of_carry)

Arguments

call_put_flag: 'c' for a call and 'p' for a put

spot: spot price

strike: strike price

time: ratio of the number of calendar days to exercise and the number of calendar days in the year

ttime: ratio of the number of trading days to exercise and the number of trading days in the year

rate: risk-free interest rate to the exercise date in percent

volatility: annualized volatility of the asset in percent for the period through to the exercise date

cost_of_carry: net cost of holding the underlying asset (for common stocks, the risk free rate less the dividend yield), defaults to 0

Description

OPT_FRENCH values the theoretical price of a European option adjusted for trading day volatility, struck at strike on an asset with spot price spot.