Beware! Buggy Options Calculator by Interactive Brokers

Discussion in 'Interactive Brokers' started by earth_imperator, Nov 4, 2022.

  1. I think the following options calculator of the broker Interactive Brokers is BUGGY! :
    https://www.interactivebrokers.com/en/trading/options-calculator.php

    It seems it works with a different number of days in year than 365 or 365.25 or 366 or 252.
    And there is also no documentation about this fact on that page.

    Anybody can figure out where the bug lies in that tool? Is it in the definition of year or rather in their implementation of the BSM algorithm?

    What a shame for such a finance & brokerage company! It's even a listed publicly traded company... .:)

    The following result is IMO buggy... The correct premium should be 13.892037, not 13.77678.
    And the Greeks are wrong as well, caused by the wrong result for the premium :

    IB-BUGGY-OC.png
     
    Last edited: Nov 4, 2022
  2. rb7

    rb7

    I'm assuming that you have compared the results from the IB calculator with something else?

    Why do you think the discrepancy is coming from the IB calculator and not the other?

    I'm not saying that the IB calculator is right, just trying to understand your point.
     
  3. B/c I'm 100% sure :D
    Of course I compared it with my own BSM algo as well with others on the web, like https://optioncreator.com/options-calculator
     
    Last edited: Nov 4, 2022
  4. This thread was originally opened in the Options board, but a dictator silently has moved it to here...
     
  5. ZBZB

    ZBZB

  6. After you provided your inputs to that model, to allow us to observe.... It seems you may be correct! -- It may be only issue with their days per year, but also, due to my limited observation, be related to other precision issue. -- I checked against: "http://www.option-price.com/index.php", which I have not vetted, but does differ from the IB reference.
     
    Last edited: Nov 4, 2022
    earth_imperator likes this.
  7. What result do you get? B/c it seems another buggy calculator as it crashes when called, gives a dumbo text "
    Operation Interrupted
    The calculator was interrupted, either by you resizing your browser window or hitting the "refresh" button more than once."
     
  8. rb7

    rb7

    On IB site, they don't tell which option pricing model they are using. Maybe not B&S.
     
  9. earth_imperator likes this.
  10. spy

    spy

    #10     Nov 4, 2022