# Documentation/Calc Functions/OPT PROB HIT

TDF LibreOffice Document Liberation Project Community Blogs Weblate Nextcloud Redmine Ask LibreOffice Donate

## Function name:

OPT_PROB_HIT

## Category:

Financial Analysis

## Summary:

Calculates the probability that an asset hits a predetermined barrier price, assuming that the stock price can be modeled as a process S that follows a stochastic differential equation (in Additional details section).

## Syntax:

OPT_PROB_HIT(**Spot**; **Volatility**; **Drift**; **Maturity**; **Lower Barrier**; **Upper Barrier**)

## Returns:

Returns a real number which is the probability that an asset hits a predetermined barrier price, assuming that the stock price can be modeled as a process S that follows a stochastic differential equation for the given parametric conditions. It ranges from 0 to 1, i.e. [0,1].

## Arguments:

**Spot** is a positive real number or a reference to the cell containing that number which is the price/value of the underlying asset and should be greater than 0.0.

**Volatility** is a positive real number or a reference to the cell containing that number which is the annual percentage volatility of the underlying asset expressed as a decimal (for example, enter 30% as 0.3). The value should be greater than 0.0.

**Drift** is a real number or a reference to the cell containing that number which is the annual stock price percentage drift rate (µ in the above formula). The value is expressed as a decimal (for example, enter 15% as 0.15).

**Maturity** is a real number or a reference to the cell containing that number which is the time to maturity of the option, in years, and should be non-negative.

**Lower Barrier** is a real number or a reference to the cell containing that number which is the predetermined lower barrier price; set to zero for no lower barrier.

**Upper Barrier** is a real number or a reference to the cell containing that number which is the predetermined upper barrier price; set to zero for no upper barrier.

- If for any of the above arguments, the mentioned constraints are not followed then, the function returns an error value.

## Additional details:

- The formula for OPT_PROB_HIT is:

where µ is the asset’s percentage drift, vol is the percentage volatility of the stock, and dW is a random sample drawn from a normal distribution with a zero mean. W is a Wiener process or Brownian motion.

- For relevant background information, visit the Options (finance) and Black-Scholes model Wikipedia pages.

## Examples:

Formula | Description | Returns |
---|---|---|

=OPT_PROB_HIT(30;0.2;0.3;1;0;40) | The function calculates the probability that an asset hits a predetermined barrier price, assuming that the stock price can be modeled as a process S that follows a stochastic differential equation (in Additional details section). | 0.611908289070705 |

=OPT_PROB_HIT(70;0.3;0.1;0.5;60;0) | The function calculates the probability that an asset hits a predetermined barrier price, assuming that the stock price can be modeled as a process S that follows a stochastic differential equation (in Additional details section). | 0.423889647113691 |

## Related LibreOffice functions:

## ODF standard:

None

## Equivalent Excel functions:

None