MATLAB: How to plot the payoff of an call/put option with matlab

MATLABoptionsplot

how can I plot:

– intrinsic value of a call/put option in matlab?

– how can I plot the call/put value including the time value?

Additionally, I would like to plot delta, gamma, vega, etc. for several strikes and time to maturity, is that possible?

thanks for your help

Best Answer

The Financial Toolbox has formulas for option prices [e.g. blsprice() for Black-Scholes model option pricing]. You can see the complete list of functions here:

http://www.mathworks.com/help/finance/functionlist.html

If you don't have that toolbox, then you might find something you can use in the File Exchange. Here's one:

http://www.mathworks.com/matlabcentral/fileexchange/33770-black-scholes-formula

(But I have no idea if it is any good.)

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Show us code to prove it, but, from the symptom described you wrote something like:

x=-7:7;
y=yourfunction(x);
plot(y)

which would display what you described (and have done precisely what you told MATLAB to do). With no x passed to it, plot doesn't know anything at all about the fact you defined x somewhere else; all it can do is use what it was given.

plot(x,y)

is the correct syntax.

HINT: Read the documentation before crying wolf! It'll be faster most of the time than waiting for somebody here to see and answer. :)

Best Answer

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