BinaryOptionImpliedVolatility | R Documentation |

The `BinaryOptionImpliedVolatility`

function solves for the
(unobservable) implied volatility, given an option price as well as
the other required parameters to value an option.

```
## Default S3 method:
BinaryOptionImpliedVolatility(type, value, underlying,
strike, dividendYield, riskFreeRate, maturity, volatility,
cashPayoff=1)
```

`type` |
A string with one of the values |

`value` |
Value of the option (used only for ImpliedVolatility calculation) |

`underlying` |
Current price of the underlying stock |

`strike` |
Strike price of the option |

`dividendYield` |
Continuous dividend yield (as a fraction) of the stock |

`riskFreeRate` |
Risk-free rate |

`maturity` |
Time to maturity (in fractional years) |

`volatility` |
Initial guess for the volatility of the underlying stock |

`cashPayoff` |
Binary payout if options is exercised, default is 1 |

The Finite Differences method is used to value the Binary Option. Implied volatilities are then calculated numerically.

Please see any decent Finance textbook for background reading, and the
`QuantLib`

documentation for details on the `QuantLib`

implementation.

The `BinaryOptionImpliedVolatility`

function returns an numeric
variable with volatility implied by the given market prices.

The interface might change in future release as `QuantLib`

stabilises its own API.

Dirk Eddelbuettel edd@debian.org for the **R** interface;
the QuantLib Group for `QuantLib`

https://www.quantlib.org/ for details on `QuantLib`

.

`EuropeanOption`

,`AmericanOption`

,`BinaryOption`

```
BinaryOptionImpliedVolatility("call", value=4.50, strike=100, 100, 0.02, 0.03, 0.5, 0.4, 10)
```

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