Error using plot: vectors must be the same lengths

I am trying to plot two function in the same file; however, I am getting the following error: "Error using plots: vectors must be the same lengths". The rest of the code works. The only problem in in the plotting. I can plot them individually, but I cannot plot them together. Please help me to find a way to do this. Here is my code:

clear; clc;
% Definition of all variables and functions
% Stock price
variance = 1;             % Variance
average = 0;              % Average
t = 10000;                % Time
stock_value(1) = 200;     % Initial stock value
% Delta hedging
K = 200;                  % Strike price
r = 0.05;                 % Risk free interest rate
sigma = 0.4;              % Volatility of asset
tau = 1;                  % Time constant
d1(1) = (1/sigma*sqrt(tau))*(log(stock_value(1)/K)+(r+(sigma^2)/2)*tau);
N(1) = normcdf(d1(1));
delta(1) = exp(-r*tau)*N(1);
for j=2:t
    % Monte Carlo somulation of stock price
    stock_value(j) = stock_value(j-1) + randn*variance;
    if stock_value(j) > 1
        variance = 0.5;
    elseif stock_value < -1
        stock_value = 2;
    else
        variance = 1;
    end
    % Delta hedging
    d1(j) = (1/sigma*sqrt(tau))*(log(stock_value(j)/K)+(r+(sigma^2)/2)*tau);
    % Cumulative normal distribution
    N(j) = normcdf(d1(j));
    % Delta
    delta(j) = exp(-r*tau)*N(j);
end
% Plots
x = linspace(0,t);
y1 = stock_value;
y2 = delta;
tiledlayout(2,1)

% Top plot
ax1 = nexttile;
plot(ax1,x,y1)
title(ax1,'Stock Value')
ylabel(ax1,'S_t')

% Bottom plot
ax2 = nexttile;
plot(ax2,x,y2)
title(ax2,'Delta to Maturity')
ylabel(ax2,'delta_t')
% Show results
% Stock value
fprintf('initial stock value    =%.8f\n',stock_value(1))
fprintf('stockvalue at first quarter    =%.8f\n',stock_value(t/4))
fprintf('stockvalue at second quarter    =%8f\n',stock_value(t/2))
fprintf('stockvalue at third quarter    =%.8f\n',stock_value((3*t)/4))
fprintf('final stockvalue    =%.8f\n',stock_value(t))
% Delta
fprintf('initial delta    =%.8f\n',delta(1))
fprintf('delta at first quarter    =%.8f\n',delta(t/4))
fprintf('delta at second quarter    =%.8f\n',delta(t/2))
fprintf('delta at third quarter    =%.8f\n',delta((3*t)/4))
fprintf('delta at maturity    =%.8f\n',delta(t))

Answer 1

[Clayton Gotberg]

The problem is that x and y1 (and y2) are different sizes. Look at the linspace documentation -

A = linspace(start,end);

returns 100 evenly spaced points between the start and end values. If you want to create a vector climbing by 1 from zero to the value of t, instead try

t_vec = 0:t; % start:step:end (if step isn't included it's assumed to be 1)

Also note that your other arrays start at t = 1, so you'll likely want this to start at 1 as well.

When I change

x = linspace(0,t);

to

x = 1:t;

I am able to execute your code without other errors.

[Anthony Knighton]

Excellent, that seemed to solve the problem.