Book Image

Python for Finance

By : Yuxing Yan
Book Image

Python for Finance

By: Yuxing Yan

Overview of this book

Table of Contents (20 chapters)
Python for Finance
About the Author
About the Reviewers

Writing a program – the comment-all-out method

Here is the logic behind this comment-all-out method: type all the lines and then comment them all. After that, we release one line at a time to debug. We use the Black-Scholes' call option as an example in the following case:

  1. Launch Python, click on File | New Window Ctrl + N. Generate the five lines of code mentioned in step 3. We include several bugs on purpose.

  2. Click on File and save it.

  3. Comment out the entire program by using a pair of triple quotation marks. Since we need some output, we add a return line as follows:

    def bs_call(S,X,T,r,sigma):
        d1 = (lo(S/X)+(r+sigma*sigma/2.)*T)/(sigma*sqrt(T))
        d2 = d1-sigmasqrt(T)
        return SCN(d1)-X*exp(-r*T)*CND(d2)
    return (X)
  4. Again, click on Run and then Run from module F5. We will see that the following output appears:

    >>>===========RESTART ===============
  5. We test it by using any set of input values as follows: