MATLAB: I can’t get the output? What’s wrong with line 13

output

function [call,put,calldif,putdif]=bs(S,r,T,sigma,K,q)
  % S is current stock price
  % r is annualized risk free rate
  % T is time to expiration (in years)
  % sigma is annualized stock return standard deviation/volatility
  % K is strike price
  % q is annualized dividend rate
  temp1=(log(S/K)+(r-q+sigma^2/2)*T)/(sigma*T^0.5);
  temp2=temp1-sigma*T^0.5;
  call=S*exp(-q*T)*normcdf(temp1)-K*exp(-r*T)*normcdf(temp2);
  put=-S*exp(-q*T)*normcdf(-temp1)+K*exp(-r*T)*normcdf(-temp2);
  [a,b]=blsprice(S,K,r,T,sigma,q);
  [calldif,putdif]=[call,put]-[a,b]
  end

Best Answer

[calldif, putdif] = [call,put] - [a,b]
is not valid MATLAB syntax. MATLAB can't distinguish how the right-hand variables should be sorted into the left-hand variables. The right-hand side is a 1x2 vector, and MATLAB doesn't "know" how you want that parceled out between the two output variables. It is similar to the (invalid) syntax
 [x,y] = [[1 2 3],[4 5]] - [[5 6 7],[8 9]]
In that case, the right-hand side is a vector of length 5, and MATLAB would not know how to split it up between x and y.
Instead, you could do
callputdiff = [call,put] - [a,b]
calldiff = callputdiff(1);
putdiff = callputdiff(2);
Alternatively, you might not need to separate them at all, just keeping them in the vector while you operate on it. Similarly, perhaps call and put could just have been in a vector themselves.
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