Strategy Calculator Help
The Strategy Calculator can be 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 8 option legs. An optional stock leg can be added, which is useful for charting covered positions. The theoretical value of a position is charted with prices calculated using either historical volatility, indexed volatility, or contract volatility.
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 additional option legs.
An option leg can be modified by changing the strike, expiration, or put/call indicator. When one of these items is changed, the quantity will be discarded and the cost and greeks will be replaced with data for the new contract.
Tip: Turn Auto Calculate off when entering multiple option legs or making a lot of changes.
Subscribers can save the Symbol, Quantity, and Cost for each leg and retrieve the strategy at a later time.
Adding A Stock Leg
Click the Add Stock button to add a stock leg. Enter the desired number of shares and the side (i.e. Long vs. Short). 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.
Changing the Volatility
The volatility used to compute the position value can be one of:
- Historical Volatility - the historical volatiliy of the underrlying stock is applied to all contracts in the strategy.
- Indexed Implied Volatility - the indexed implied volatiliy of near the money, near term contracts is applied to all contracts in the strategy.
- Contract Volatility - the implied volatility of each contract is applied independent of other contracts. Position values may be computed using different volatilies.
Select the volatility method by clicking on the icon 
next to the Volatility text box.
Zooming and Scrolling
The 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 chart is drawn as if the contract or stock was not part of the position. This feature can be used to simplify cluttered charts, perform What-If scenarios, or to isolate other legs in the strategy. Setting the quantity of a leg to zero has the same effect as hiding a leg.
Saving the Strategy
Subscribers can save strategies by clicking 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.