Simple Option Element Example

This model demonstrates how an option element can be used to model a call on an underlying stock. A History Generator element is used to model the price movement of the underlying stock, which is fed into the Option element. The strike price, option type, term, and conditions for exercise prior to expiry (since this is an American option) are all specified in the option element. If the condition for exercise occurs, or the value of the option is greater than zero at the end of the option's term, the option is exercised and a discrete change representing profit from the option is placed in the Profit_Realized integrator.

To Open the Model File:

1. Start GoldSim
2. Click on the File and select Open Example...
3. Browse to General Examples --> Financial Examples
4. Select the file called Option.gsm