How To Fix TE720 - Error while calculating the price of an European option (&)

SAP Error Message - Details

• Message type: E = Error

• Message class: TE - Market Risk Management

• Message number: 720

• Message text: Error while calculating the price of an European option (&)

Self-Explanatory Message

Since SAP believes that this specific error message is 'self-explanatory,' no more information has been given.The majority of messages in the SAP system have a message text, however this is frequently insufficient to comprehend or resolve the problem.

To make things easier, more detailed information is frequently added to describe the issue, how to fix it, and the necessary steps or configuration modifications.

Unfortunately, there isn't any extra information in this error notice.

What else can you do?

First, use our AnswerBot below to get a possible cause and solution (requires a premium subscription).

Also, review the in-depth Common Questions & Answers listed below; you could discover a solution there or be able to connect with others who have faced similar challenges.

You can also try searching the SAP support portal (support.sap.com) but you need a special user ID to access it. It is possible that an SAP support note exists that provides additional details about the mistake or even steps for fixing it.

Smart SAP Assistant

• What is the cause and solution for SAP error message TE720 - Error while calculating the price of an European option (&) ?

  The SAP error message TE720, which indicates an error while calculating the price of a European option, typically arises in the context of financial applications that deal with derivatives pricing. Here’s a breakdown of the potential causes, solutions, and related information for this error:
  Causes:
  
  
  Input Data Issues: Incorrect or incomplete input data for the option pricing model can lead to calculation errors. This includes parameters like strike price, underlying asset price, volatility, interest rates, and time to expiration.
  
  
  Model Configuration: The pricing model used for calculating the option price may not be configured correctly. This could involve settings related to the Black-Scholes model or other pricing models.
  
  
  System Configuration: There may be issues with the configuration of the SAP system itself, such as missing or incorrect settings in the financial module.
  
  
  Data Type Mismatch: If the data types of the input parameters do not match the expected types (e.g., strings instead of numbers), this can cause calculation errors.
  
  
  Software Bugs: There may be bugs or issues in the version of the SAP software being used that affect the option pricing functionality.
  
  
  Solutions:
  
  
  Verify Input Data: Check all input parameters for the option pricing calculation. Ensure that they are complete, accurate, and in the correct format.
  
  
  Review Model Configuration: Ensure that the pricing model is set up correctly in the system. This may involve checking the configuration settings for the financial instruments.
  
  
  Check System Settings: Review the overall configuration of the SAP system, particularly in the financial modules related to derivatives and options pricing.
  
  
  Consult Documentation: Refer to SAP documentation or help resources for guidance on the specific error message and its context. This may provide insights into common issues and their resolutions.
  
  
  Update Software: If the issue is suspected to be a bug, check for updates or patches for the SAP software that may address the problem.
  
  
  Contact SAP Support: If the issue persists after trying the above solutions, consider reaching out to SAP support for assistance. They can provide more specific guidance based on the version of the software and the context of the error.
  
  
  Related Information:
  
  SAP Financial Services: Understanding the financial services module in SAP can provide insights into how options and derivatives are managed.
  Option Pricing Models: Familiarity with models like Black-Scholes, Binomial, or Monte Carlo simulations can help in understanding the calculations involved.
  SAP Notes: Check SAP Notes for any known issues related to TE720 and their resolutions. SAP Notes often contain valuable troubleshooting information.
  
  By addressing the potential causes and following the suggested solutions, you should be able to resolve the TE720 error in SAP.