> ## Documentation Index
> Fetch the complete documentation index at: https://docs.fincept.in/llms.txt
> Use this file to discover all available pages before exploring further.

# Short Rate Bond Option Pricing

> Price European call and put options on zero-coupon bonds using short rate models. Bond options are fundamental building blocks for swaptions, callable bonds, and other interest rate derivatives. The model provides analytical pricing for both calls and puts, useful for hedging bond portfolios or speculating on rate movements. [Tier: ENTERPRISE, Credits: 10]



## OpenAPI

````yaml api-specs/models.json post /quantlib/models/short-rate/bond-option
openapi: 3.1.0
info:
  title: FinceptQuantLib API - Models
  description: >-
    Advanced financial modeling module for short rate models, stochastic
    volatility, jump-diffusion processes, and local volatility models. Pro Tier
    required (5 credits per request).
  version: 3.0.0
  contact:
    name: Fincept API Support
    url: https://fincept.in
servers:
  - url: https://api.fincept.in
    description: Fincept API Production Server
security:
  - APIKeyHeader: []
tags:
  - name: quantlib-models
    description: >-
      Advanced financial modeling including short rate models, stochastic
      volatility, jump-diffusion, and local volatility models
    x-displayName: Models
paths:
  /quantlib/models/short-rate/bond-option:
    post:
      tags:
        - quantlib-models
      summary: Short Rate Bond Option Pricing
      description: >-
        Price European call and put options on zero-coupon bonds using short
        rate models. Bond options are fundamental building blocks for swaptions,
        callable bonds, and other interest rate derivatives. The model provides
        analytical pricing for both calls and puts, useful for hedging bond
        portfolios or speculating on rate movements. [Tier: ENTERPRISE, Credits:
        10]
      operationId: short_rate_bond_option
      requestBody:
        required: true
        content:
          application/json:
            schema:
              type: object
              properties:
                model:
                  type: string
                  enum:
                    - vasicek
                    - cir
                  default: vasicek
                  description: Short rate model for option pricing
                kappa:
                  type: number
                  default: 0.1
                  description: Mean reversion speed
                theta:
                  type: number
                  default: 0.05
                  description: Long-term mean rate
                sigma:
                  type: number
                  default: 0.01
                  description: Rate volatility
                r0:
                  type: number
                  default: 0.03
                  description: Initial short rate
                T:
                  type: number
                  default: 1
                  description: >-
                    Option maturity in years. The option expires at time T,
                    giving the right to buy/sell a bond maturing at T+1
              example:
                model: vasicek
                kappa: 0.12
                theta: 0.05
                sigma: 0.015
                r0: 0.04
                T: 0.5
      responses:
        '200':
          description: Successfully priced bond options
          content:
            application/json:
              schema:
                type: object
                properties:
                  success:
                    type: boolean
                    example: true
                  data:
                    type: object
                    properties:
                      call_price:
                        type: number
                        description: Call option price (per $100 face value bond)
                      put_price:
                        type: number
                        description: Put option price (per $100 face value bond)
                      model:
                        type: string
                        example: vasicek
                    example:
                      call_price: 1.23
                      put_price: 0.87
                      model: vasicek
        '401':
          $ref: '#/components/responses/UnauthorizedError'
        '402':
          $ref: '#/components/responses/InsufficientCreditsError'
        '422':
          $ref: '#/components/responses/ValidationError'
components:
  responses:
    UnauthorizedError:
      description: Authentication information is missing or invalid
      content:
        application/json:
          schema:
            type: object
            properties:
              detail:
                type: string
                example: Invalid API key
    InsufficientCreditsError:
      description: Insufficient credits to complete the request
      content:
        application/json:
          schema:
            type: object
            properties:
              detail:
                type: string
                example: >-
                  Insufficient credits. This endpoint requires 5 credits.
                  Current balance: 2 credits.
    ValidationError:
      description: Request validation failed
      content:
        application/json:
          schema:
            type: object
            properties:
              detail:
                type: array
                items:
                  type: object
                  properties:
                    loc:
                      type: array
                      items:
                        type: string
                    msg:
                      type: string
                    type:
                      type: string
          example:
            detail:
              - loc:
                  - body
                  - kappa
                msg: field required
                type: value_error.missing
  securitySchemes:
    APIKeyHeader:
      type: apiKey
      in: header
      name: X-API-Key
      description: >-
        API key for authentication. Get your key at
        https://api.fincept.in/auth/register

````