plot a line that shows the difference between two lines

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hi,
I have the following code:
x=[0:0.0001:20]
y1=blsprice(x,10,0.02,0.2,0.2)-blsprice(10,10,0.02,0.2,0.2)
x1=[8:0.001:12]
y2=[0.85:-0.000425:-0.85]
plot(x,y1,x1,y2,'k')
xlabel('Stock Price ($)');
ylabel('Option price ($)');
axis([8 12 -1 2]);
text(10,1.1,'delta-hedge at t=0')
that gives me one straight line and a curve and I would like to plot a third line with the difference (y1-y2) but it's not working, probably due to the fact that there are different elements, is there any way to do this?

Answers (2)

Walter Roberson
Walter Roberson on 1 Apr 2013
Use interp1() to produce values with a common x base so that you can subtract meaningfully.
  10 Comments
Locks
Locks on 1 Apr 2013
thanks
is there a way to include also the other plots I have above?

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Locks
Locks on 2 Apr 2013
thanks! it's working now, but is there really no way to get the exact slope? because I plot the difference (or to be more exact it's the sum because the curve starts negative and the line becomes negative) and the combined position should show a delta hedged position and at the moment it's obvious that this is just an bad proxy
  2 Comments
Walter Roberson
Walter Roberson on 2 Apr 2013
Edited: Walter Roberson on 2 Apr 2013
As discussed in http://www.mathworks.co.uk/matlabcentral/answers/69325-plot-the-slope-of-a-curve-in-the-same-plot#answer_80575 in order to get the exact slope, you need to work with the formula, not with the calculated data points.
Imagine you are heading due west on a road, and you can see 1 km ahead that the road continues on due west. What is the exact slope?
Oh, did I forget to mention that you are on a mountain-side and that the road you can see ahead is on the next peak over?
Locks
Locks on 2 Apr 2013
the slope at a specific point should be the first dderivative or am I mistaken? I don't see how I can implement your example in a way to create a line with the same slope just with the negative slope starting on the upper left corner

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