![]() An option to buy is labelled a call, whilst a put option allows the holder to sell the asset. An option is a contract giving the holder the right (but not the obligation) to buy or sell an asset at an agreed price (called the strike) on or before the expiration of the option. We have previously given an elementary introduction to option pricing elsewhere some salient points are summarised here for the sake of convenience. Our application (which can be downloaded from here) might be of interest for teaching purposes, or for those readers who are simply curious about the behaviour of option pricing functions. In the Library's latest release, these have been supplemented by new routines that determine prices for so-called financial options, and we present an application here that uses these routines to calculate and display option prices in MATLAB (a preliminary description of this application has already appeared in the NAG Blog). Here, we turn our attention to part of the S chapter of the Library, which contains routines for the calculation of approximations to special functions in mathematics and physics. This article is the latest in an occasional series (the previous article is here) that illustrates the Toolbox's capabilities using examples which highlight the use of specific routines within MATLAB applications. ![]() The NAG Toolbox makes the full functionality of the NAG Library available from within MATLAB®.
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