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Model limits4 minute read
What does no feasible result mean for an option target?
Understand why a pricing scenario may not contain an underlying price that matches the selected option premium
Prepared by Mark · Primary sources below
Direct answer
No feasible result means the pricing calculation could not find an underlying price within its supported search range that makes the selected contract equal the target premium at the chosen checkpoint and assumptions. It is a statement about that model scenario, not a forecast that the market can never print the target, a probability estimate, or an instruction to change the position
The failure belongs to one scenario
The contract, target premium, checkpoint, implied volatility, rates, dividends, and model define the question being solved. A failure to find a matching underlying price applies only to that combination. Changing an input creates a new question rather than repairing the old answer
Premium bounds can conflict with the target
Option values have structural limits under a pricing model. A put, for example, cannot gain without limit as the underlying approaches zero, while a call target may lie beyond the calculation's supported stock-price range. Numerical stability checks can also reject an output instead of returning a boundary value that does not actually reproduce the target
Scenario changes need an economic reason
An earlier checkpoint leaves more time value, a lower target asks the model to match a smaller premium, and another volatility assumption changes the value assigned to uncertainty. Each may produce a solvable case, but inputs should reflect the question being investigated rather than being adjusted only until a number appears
Preserve the unsuccessful comparison
A no-result state is still information about the chosen assumptions. Keep the target and scenario visible, then compare one justified change at a time. That record makes clear which input restored a solution and prevents a feasible alternative from being mistaken for evidence that the original target will occur
Common questions
Does no feasible result mean the target premium is impossible?
No. It means no matching underlying price was found under the selected model inputs and supported range. Market prices and future inputs can differ, but that uncertainty does not turn the target into a forecast
Should I lower the target until the calculator returns a number?
Only if a lower target represents a scenario you genuinely want to examine. Lowering it solely to force an output hides the original question; comparing both cases is more informative
Sources and further reading
See the condition behind your target
Choose a contract, target premium, and checkpoint to see what changes when time or implied volatility moves
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