I am trying to replicate the results in Consistent Pricing of FX Options, A. Castagna and F. Mercurio. However, when I calculate the strike prices for 25-delta put and call and ATM I cannot get the same result as in the article. The parameters given in the article (p.5): - T = 94/365 - S = 1.205 - s(ATM) = 0.0905 - s(RR) = -0.0050 - s(BF) = 0.0893 These result in s(25dPut) = 0.0943 and s(25dCall) = 0.0893 (equations 4 and 5 on pages 2 and 3). - K(25dPut) = 1.1733 - K(25dCall) = 1.2487 The values I get (equations 6 and 7 on p. 3) are: - K(25dPut) = 1.16688287... - K(25dCall) = 1.2421907... Here is my Python code: <code> S = 1.205 tau = 94.0 / 365.0 iv_v = 0.0905 rr_v = -0.005 bf_v = 0.0013 for_df = 0.9902752 dom_df = 0.9945049 vol_call = iv_v + bf_v + 0.5 * rr_v vol_put = iv_v + bf_v - 0.5 * rr_v alpha = - scipy.stats.norm.ppf( 0.25 * np.exp( (for_df**(-1) - 1) * tau) ) k1 = S * np.exp( - alpha * vol_put * np.sqrt(tau) + ((dom_df**(-1) - 1) - (for_df**(-1) - 1) + 0.5 * vol_put**(2) ) * tau ) k2 = S * np.exp( alpha * vol_call * np.sqrt(tau) + ((dom_df**(-1) - 1) - (for_df**(-1) - 1) + 0.5 * vol_call**(2) ) * tau ) </code>