Articles, Blog

Options Calculator

October 12, 2019


Hi This is Tod. Let’s talk about options calculator.
After that we will jump over to my trading software and see some examples of modern calculators
in action. An old style options calculator was really very crude compared to the tools
used today for analyzing option pricing action. An old style options calculator would typically
just solve for a fair value price for a options price if you fed it the variables for the
formula being used. In other words, it was kind of cumbersome to use and of limited value.
Now, today instead of just an option calculator solving for a fair value price on a single
option, there are many tools available from our online brokers. Let’s look at some examples
of new style option calculators. What we are looking at here is my online broker software
I use for trading options. In here this is an options table and it is also a very powerful
options calculator. So here we are looking at the SPY which is an ETF for the spyder
S and P 500. Here is a bunch of strike prices. This is the expiration column and this is
about 50 days out. You have all these different options you can choose from, both puts and
calls. We can see from here on this one we have what is called the theo price, the bid
and ask price and the mark. Theo price is the one that the options calculator uses.
In this example here which is one of many, as there are a lot of ways we can construct
these tables and do all sorts of things But here we can adjust the time because in options
we have to account for time, volatility as well as the underlying stock price. Here we
can adjust the time and see it affect the pricing action on this column here. We can
change the stock price or the volatility. For example, we give this some time we can
see it change the theo price there. So you can see the effects of all these things. This
is a very powerful tool. I have used some of the old options calculators because that
was all that was available years ago and this is just so far advanced it is just crazy.
In addition to that, you have all these other types of settings. You can see the greeks,
you can get more columns here where you can see the greeks, extrinsic values, intrinsic’s,
probabilities, volume, open interest and a whole bunch of stuff you can organize this
to do. In addition to that on this software tab this blue window here is profit and loss
graph for an option. You can see i selected this single option here. It is a 115 put in
july just one. You can see here the price today is right up in here. So you can see
what it is going to do at expiration and over time. Down here you can vary it just like
the other one. you can see it graphically too. It is really powerful. In addition to
that we can do a more complex trade where in the tables it was pretty much just single
options. Here we can look at a complex trade which is a sell and a buy which is what is
called a credit spread and it involves selling some and buying other options. And you can
see that you can adjust everything and see profit and loss for a whole group of options.
Again we can see we can adjust volatility, the price and the date and just do a bunch
of other advanced things too. So I am impressed with the new options calculators it just makes
life so easy but you have to learn how to use them. So if this is of some interest to
you jump onand take the link down below there and jump over to real-world options. There
is a lot more information over there if options trading is something you want to learn more
about. We have a course there. I would also like to hear what you think about this video
so write in the comments down below as well. Thanks, talk to you later, bye.

You Might Also Like

8 Comments

  • Reply RealWorldOptions June 6, 2012 at 6:51 pm

    I hope you enjoy this informative video!
    To learn more about options trading take the link in the description up above to visit real-world options. At real-world options you will find a modern and innovative online course which will provide you with everything you need to know to get you trading options profitably and confidently very quickly.

  • Reply nissin mhami August 28, 2012 at 9:03 pm

    Newer style Option Calculator is much better

  • Reply Rick (also known as ikkbenrick12) August 31, 2012 at 11:25 pm

    the password is waller but it says wrong pass :/

  • Reply umair amjad September 3, 2012 at 4:19 am

    nice

  • Reply RealWorldOptions September 21, 2012 at 9:36 pm

    I find the tools that are provided to us by our discount brokers work very well.

  • Reply RealWorldOptions September 21, 2012 at 9:37 pm

    I agree. Discount brokers today are providing really nice tools as part of the competition for our business.

  • Reply Shailendra dutta November 17, 2012 at 3:21 pm

    I just made billions using the in depth techniques provided in the video.
    Now i know how to use a calculator……"just fill in the variables" simple.
    Thanx

  • Reply Dimitar Stoykov October 19, 2016 at 3:44 pm

    i turn $250 to $1850 overnight with BinaryRobox get 100% free access at: facebook.com/binaryrobox/app/190322544333196/ it's certified and legit binary option robot 4 trading with winning average of 88% and up. Search on Google for binaryrobox

  • Leave a Reply