Falcon7 Tutorial
Opti=
on
Calculator
Option
calculator is an indispensable option provided exclusively for our option
traders. This option calculator helps you understand how options are priced,
how important parameters affect the option price, how changes in parameters
affect the option price, and how the option price and important parameters
change as the asset price changes. Knowledge of the above said gives you the
crucial advantage when analyzing and comparing various option positions.
![3Dtime](3D"OptionCalculator_files/image002.gif")
Time Required: 15 min
Option Calculator ![3Dcalculator](3D"OptionCalculator_files/image004.gif")
![3D=](3D"OptionCalculator_files/image006.gif")
Go to Watches menu-> Options Calcula=
tor as
shown in figure 1.
Figure 1 =
&nb=
sp;
The following window shows op=
tion
calculator with all fields being populated.
![3D"opt](3D"OptionCalculator_files/image008.gif")
=
&nb=
sp; =
&nb=
sp;
&nb=
sp; Figure
2
The above figure shows the various inp=
uts
and values in the option calculator.
Fields Description ![3D"d3A%20big%20pack%20notep=](3D"OptionCalculator_files/image010.gif")
Settings![3DSetting-icon](3D"OptionCalculator_files/image012.gif")
- The
option scrip type can sel=
ected
from the scrip selections options grid.
- Inputs =
![3D"Panel%20Setting%20Icon"](3D"OptionCalculator_files/image013.jpg")
Various inputs have b= een provided which can be altered and thus greek values, implied volatility etc= can be calculated.
- Spot
rate: It is the price that is quoted =
for
immediate settlement of a stock. You can make a selection between Futu=
re
rate and Cash rate.
- Drop-down:
Parameter on the basis of which option price needs to be calculated ca=
n be
selected form the drop-down.
- Future
Rate: It shows the change in future price of fut=
ures
stocks
- Cash
Rate: It shows the change in cash rat=
e of
call/put options
- Strike
price: It shows the current price of
options scrips
- Days2Expiry:
It shows the number of days after which the options contract would exp=
ire
- Risk
Free % : It is the interest
rate of options contract
- Volatility:
It is the variation in price of stock as per market flow change.
- Refresh:
Updates values as per market change. Strike Price, Days2Expiry, Risk F=
ree%
and Volatility values can be altered as per requirement and the altered
values will get updated in the display pane.
- Actu=
al:
Ticking on this updates actual price values as per market change
Buttons=
![3D"final](3D"OptionCalculator_files/image015.jpg")
- Price/Greeks:
Click on it calculate the price
values and greek values of the selected option stock
- Implied
Volatility: Click on it to calcul=
ate
the implied volatility of the selected option stock
- Save:
Click on it to save the settings =
made
- Load:
Click to load the saved option
calculator file
- Expo=
rt: Click
to export the whole data in .=
csv
format
Call and Put
The updat= ed theoretical values, actual values and implied volatility of call and put options are displayed in this provided refresh is checked.
Removing tick from refresh stops updating theoretical values= and implied volatility
- Display
Pane
![3Ddisplay](3D"OptionCalculator_files/image017.gif")
- Values
in bracket indicate –ve values.
<= span style=3D'font-size:12.0pt;line-height:150%;font-family:"Microsoft Sans Seri= f","sans-serif"'>
You can open multiple instances of option calculator at a ti= me
Practice![3Dnotepad-107](3D"OptionCalculator_files/image019.gif")
Try practicing the following activities for your understanding:
- and
calculate Price and greek values for that scrip in case of call and put
options
-
References
![3Dreferences](3D"OptionCalculator_files/image021.gif")
- ht=
tp://en.wikipedia.org/wiki/Option_(finance)
=
- ht=
tp://en.wikipedia.org/wiki/Option_(finance)
- Values
in bracket indicate –ve values.
- Spot
rate: It is the price that is quoted =
for
immediate settlement of a stock. You can make a selection between Futu=
re
rate and Cash rate.