# Option Models

Molecule has built-in option models that provide pricing (or compute implied volatilities) for options as part of the Trades model. These include:

* Black-76 (typically for European Options)
* Turnbull-Wakeman (typically for average-priced, or Asian, options)
* Bachelier (for spread options, or options where the underlying can go negative)

Molecule also has a Kirk's Approximation model available as part of the Assets model.

#### Validation

Molecule's option models are generally designed by referencing the original academic paper for each topic. We also consult [Options, Futures, and Other Derivatives (Hull)](https://www.amazon.com/Options-Futures-Other-Derivatives-10th/dp/013447208X), internal experts, retained experts, and customers for assistance when necessary.

Testing follows our standard automated and manual testing processes, typically with real data. Additional testing is also done using [Matlab](https://www.mathworks.com/help/finance/blsdelta.html) (which generally refers to sources such as Hull and the original academic papers).