MCP Calc Tools

Instructions

Implementation Reference

• index.js:566-568 (handler)

  The handler function executed when the 'black_scholes' tool is called, which destructures inputs and invokes the core Black-Scholes function.

  async ({ S, K, T, r, sigma, optionType }) => {
    return blackScholes(S, K, T, r, sigma, optionType);
  }

• index.js:555-564 (schema)

  Zod schemas defining the input parameters (S, K, T, r, sigma, optionType) and output (number or error string) for the black_scholes tool.

  inputSchema: z.object({
    S: z.number().describe('Current price of the asset'),
    K: z.number().describe('Strike price of the option'),
    T: z.number().describe('Time to expiration in years'),
    r: z.number().describe('Risk-free interest rate'),
    sigma: z.number().describe('Volatility of the asset'),
    optionType: z.enum(['call', 'put']).default('call')
      .describe('Option type: "call" or "put"')
  }),
  outputSchema: z.union([z.number(), z.string()]),

• index.js:551-569 (registration)

  Registration of the 'black_scholes' tool using ai.defineTool, including name, description, schemas, and handler.

  ai.defineTool(
    {
      name: 'black_scholes',
      description: 'Calculate Black-Scholes option price',
      inputSchema: z.object({
        S: z.number().describe('Current price of the asset'),
        K: z.number().describe('Strike price of the option'),
        T: z.number().describe('Time to expiration in years'),
        r: z.number().describe('Risk-free interest rate'),
        sigma: z.number().describe('Volatility of the asset'),
        optionType: z.enum(['call', 'put']).default('call')
          .describe('Option type: "call" or "put"')
      }),
      outputSchema: z.union([z.number(), z.string()]),
    },
    async ({ S, K, T, r, sigma, optionType }) => {
      return blackScholes(S, K, T, r, sigma, optionType);
    }
  );

• index.js:502-517 (helper)

  Core helper function that computes the Black-Scholes option price using the normal CDF approximation.

  const blackScholes = (S, K, T, r, sigma, optionType = 'call') => {
    try {
      const d1 = (Math.log(S / K) + (r + 0.5 * sigma * sigma) * T) / (sigma * Math.sqrt(T));
      const d2 = d1 - sigma * Math.sqrt(T);
  
      if (optionType === 'call') {
        return S * normalCDF(d1) - K * Math.exp(-r * T) * normalCDF(d2);
      } else if (optionType === 'put') {
        return K * Math.exp(-r * T) * normalCDF(-d2) - S * normalCDF(-d1);
      } else {
        throw new Error('Invalid option type. Must be "call" or "put".');
      }
    } catch (e) {
      return `Error: ${e.message}`;
    }
  };

• index.js:491-496 (helper)

  Helper function approximating the cumulative distribution function (CDF) of the standard normal distribution, used in Black-Scholes.

  const normalCDF = (x) => {
    const t = 1 / (1 + 0.2316419 * Math.abs(x));
    const d = 0.3989423 * Math.exp(-x * x / 2);
    const p = d * t * (0.319381530 + t * (-0.356563782 + t * (1.781477937 + t * (-1.821255978 + t * 1.330274429))));
    return x >= 0 ? 1 - p : p;
  };