Strategy Calculator Help
The Strategy Calculator is used to chart multi-leg option strategies. The effects of changes in the underlying stock price, time to expiration, volatility, interest rate, and yield can be shown graphically for any strategy with up to 5 option legs. An optional stock leg can be added, which is useful for charting covered positions. The theoretical value of a position can be charted with prices using current market volatility. Profit and Loss can also be charted by entering the price paid for a position.
Loading a Stock
Select an underlying stock by entering the symbol in the text box labeled Stock
Symbol. Click the Load 
button. The symbol, stock name, historical volatility and dividend information
will be displayed. A random option will also be added to the list of option legs
below the chart. Loading a stock clears existing information.
Adding Option Legs
Click the Add Option button to add a new option leg.
An option leg can be modified in one of two ways:
- Click on the option symbol or the Load
button to the left of the option symbol. A window with the option chain for the underlying stock will be displayed. Click on the desired
symbol in the option chain. The popup window should close and the
corresponding option symbol will be loaded in the list list of option legs.
- Alternately, the strike, expiration, or put/call indicator can be used to select the desired option. When one of these items is changed, the corresponding symbol will be displayed. Tip: Turn Auto Calculate off when entering new option legs.
If no option corresponding to the selected strike, expiration, and put/call indicator is found, the symbol will be set to 'Unknown' and the historical volatility will be used to calculate the price of the option.
Adjusting Legs
The Strike, Expiry, and Put/Call settings can be changed to select a different option leg. If the option leg is changed, the Cost, Theoretical Price, and Price are overwritten. Greeks are also recomputed.
Position Value vs. Profit and Loss
Selecting Position Value as the Chart Type will show the value of the position irrespective of the cost basis.
.
Selecting Profit & Loss shows the value of the position relative to the cost basis, (i.e. the cost to enter the position).
The Cost is used to compute the Profit and Loss relative
to the current price, which can be entered in the Price textbox. When a position is
initially loaded TPrice is updated
with the current price of each leg and copied to the corresponding Price text
box. When reloading a saved position, the previous Price is loaded into the
Price text box. In order to compute the profit and loss
using the current TPrice, the TPrice must be copied to the Price box. As a convenience,
this can done by clicking on the adjacent blue arrow .
Subscribers can save the Cost and Price for each leg and retrieve
the position at a later time.
Note: that value in the Price textbox has no effect on the chart when "Show values near expiration is checked", since the expected price at expiration is used, not the value in the Price textbox.
Adding A Stock Leg
Click the Add Stock button to add a stock leg. Enter the desired number of shares and the side. When computing profit and loss, the price paid per share should be entered.
Charting Selecting Strategies
Once the desired strategy legs have been entered the chart can be drawn by
clicking the Calculate 
button. Changes in the strategy can be charted for:
- Price Change - changes in the value or profit and loss of the strategy will be displayed as the price changes. The range of prices can be changed by clicking one of the Zoom options.
- Days Left - changes in the value or profit and loss of the strategy will be displayed for each day starting with the most recent trading day and ending with the latest expiration of any of the option legs. If a dividend is paid during the charted time, the chart will be adjusted accordingly. Only one discrete dividend will be considered.
- Past History - the value of the position will charted using the historical data for the past 30 days through expiration.
- Volatility - changes in the value or profit and loss of the strategy will be displayed for predetermined increments of volatility in the range of 0 to 4.
- Interest Rate - changes in the value or profit and loss of the strategy will be displayed for predetermined rate changes.
- Yield - changes in the value or profit and loss of the strategy will be displayed for predetermined changes in yield. The yield is considered to be continuous and the ex-dividend date is ignored when this option is selected.
Zooming and Scrolling
They Zoom and Scroll controls can be used to re-center or zoom in on the current chart. They are only available when solving for changes in price.
To center the graph on a desired price range, click the corresponding scroll
buttons. 
The Zoom controls 
can be used to
adjust the price range when displaying a strategy. To zoom out and show a wider
price range, click the Zoom button labeled -, to
zoom in click the Zoom button labeled + .
Removing Legs
Option and stock legs can be removed be clicking the checkbox labeled 
.
The leg is immediately deleted. Uncheck the Auto Calculate option to prevent
immediate deletion. When Auto Calculate is unchecked, legs will only be deleted
when the Calculate button is clicked.
Hiding Legs
The lines in the chart that correspond to individual legs can be hidden. When a line is hidden, the position value and the profit and loss reflect the value of the hidden line, the line is simply not drawn. This feature can be used to simplify cluttered charts or to emphasize other legs in the strategy. The position value and profit and loss lines cannot be hidden. Setting the quantity of a leg to zero to suppress it from the chart but retain the position in the list for future use.
Saving the Strategy
Subscribers can save strategies by click the Save 
button. A dialog will appear and a name can be assigned to the chart. Enter a
name in the text box and click the Save button.
Open an Existing Strategy
Subscribers can open strategies by click the Open >img src="/images/open.gif"> button. A popup menu will appear that will list saved strategies. Select the
desired strategy and click the Open 
button. The chart will be restored to the saved state.
Deleting an Existing Strategy
Click the Delete 
button. A popup menu will appear that will list saved strategies. Select the
desired strategy and click the Delete button. The chart will be removed from the system
Printing a Chart
Click the print 
button to print the chart. The chart will be redrawn without menus or page banners. Click the print icon again to print the chart. Clicking 
will cancel printing and return to the previous screen. Reducing margins to .2 inches or smaller may be
required for some printers. For best results, configure your printer to print in
landscape mode.
Auto Calculate
Select 
to
submit changes to stock and option legs without the need to click the Calculate button. If the Auto
Calculate option is not selected, the Calculate button must be clicked for
current selections to be displayed in the chart. Turning Auto Calculate off is a
good idea when initially entering strategies.