How to graphically represent this function?

How to graphically represent this function? - Printable Version

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How to graphically represent this function? - dc996 - Apr-28-2019

Hi everyone,

I've tried multiple times to represent this function in Python, but I am still unsuccessful.

This is the function:

def CON_call_price(spot,strike,tau,sigma,r,q,phi,x):
    d1 = (log(spot/strike)+(r-q+0.5*sigma**2)*tau)/(sigma*sqrt(tau))
    d2 = (d1-sigma*sqrt(tau))
    
    y = x*exp(-r*tau)*norm.cdf(d2)
    
    return y

And this is how I tried to represent it:

from math import exp, log, sqrt
from scipy.stats import norm
import matplotlib.pyplot as plt
plt.style.use('ggplot')
plt.rcParams['xtick.labelsize'] = 14
plt.rcParams['ytick.labelsize'] = 14
plt.rcParams['figure.titlesize'] = 18
plt.rcParams['figure.titleweight'] = 'medium'
plt.rcParams['lines.linewidth'] = 2.5


def CON_call_price(spot,strike,tau,sigma,r,q,phi,x):
    d1 = (log(spot/strike)+(r-q+0.5*sigma**2)*tau)/(sigma*sqrt(tau))
    d2 = (d1-sigma*sqrt(tau))
    
    y = x*exp(-r*tau)*norm.cdf(d2)
    
    return y

    P = list(map(lambda x:  x if spot > strike else 0))
    return P

S = [t/5 for t in range(0,1000)] 

fig, ax = plt.subplots(nrows=1, ncols=1, sharex=True, sharey=True, figsize = (20,15))
fig.suptitle('Payoff Function for CON CALL', fontsize=20, fontweight='bold')

bc_P = CON_call_price(120,100, 1, 0.25, 0.2, 0.03, 1, 50)
plt.subplot(222)
plt.plot(S, bc_P, 'b')
plt.legend(["Binary Call"])

plt.show()

This is the result I get:

Error:File "<ipython-input-41-b68d66dfa3e5>", line 1, in <module>
    runfile('C:/Users/Admin/Desktop/CON_call_put.py', wdir='C:/Users/Admin/Desktop')

  File "C:\Users\Admin\Anaconda3\lib\site-packages\spyder_kernels\customize\spydercustomize.py", line 704, in runfile
    execfile(filename, namespace)

  File "C:\Users\Admin\Anaconda3\lib\site-packages\spyder_kernels\customize\spydercustomize.py", line 108, in execfile
    exec(compile(f.read(), filename, 'exec'), namespace)

  File "C:/Users/Admin/Desktop/CON_call_put.py", line 30, in <module>
    plt.plot(S, bc_P, 'b')

  File "C:\Users\Admin\Anaconda3\lib\site-packages\matplotlib\pyplot.py", line 2813, in plot
    is not None else {}), **kwargs)

  File "C:\Users\Admin\Anaconda3\lib\site-packages\matplotlib\__init__.py", line 1810, in inner
    return func(ax, *args, **kwargs)

  File "C:\Users\Admin\Anaconda3\lib\site-packages\matplotlib\axes\_axes.py", line 1611, in plot
    for line in self._get_lines(*args, **kwargs):

  File "C:\Users\Admin\Anaconda3\lib\site-packages\matplotlib\axes\_base.py", line 393, in _grab_next_args
    yield from self._plot_args(this, kwargs)

  File "C:\Users\Admin\Anaconda3\lib\site-packages\matplotlib\axes\_base.py", line 370, in _plot_args
    x, y = self._xy_from_xy(x, y)

  File "C:\Users\Admin\Anaconda3\lib\site-packages\matplotlib\axes\_base.py", line 231, in _xy_from_xy
    "have shapes {} and {}".format(x.shape, y.shape))

ValueError: x and y must have same first dimension, but have shapes (1000,) and (1,)

I also get a figure, but no graph in it.

I've seen some plot functions, but for some reason I can't get this to work, unfortunately.

Thank you in advance.

RE: How to graphically represent this function? - scidam - May-03-2019

You need to compute values of your function for all values in S. Just replace line #28 in your code with the following:

bc_P = [CON_call_price(120,100, 1, 0.25, 0.2, 0.03, 1, s) for s in S]