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I've entered the Black-Scholes Option Pricing Formula into an Excel
spreadsheet...maybe.:)) I wanted to test it to see if I got it
entered correctly, so I input the same option-pricing parameters into
both my Excel formula and Optionscope. Same security price, strike,
time to expiry, volatility, interest rate, etc.
The call price calculations were within 2/10 of 1% of each other, and
I'm assuming that could just be because of a difference in rounding
between the two software programs.
But the put price calculations are off by about 10%. (Excel came out
with a put price 10% lower than Optionscope.)
I'm using Excel 2000 and Optionscope 2.1 (in Metastock 6.52).
Are there differences in the way that Metastock makes calculations
and the way Excel makes them? Any assumptions that are different in
the two software programs that might cause subtle changes in the
outputs? Did MS alter Black-Scholes in some way when they entered
the formula into Optionscope? Have I discovered a "bug" in an out-of-
date software package?:) Or is my high-school algebra simply so far
out-of-date that the old rules don't even apply any more and I've
made an embarrassing rookie error?:)))
TIA for any helpful hints.:)
Luck to all,
Sebastian
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