Is there a software that helps you calculate what the price of your Stock Option will be $2 to $5.00 above the current price? How come as the underlying goes most of the Greeks disappear? I have had problems getting filled when the stock is, let me give you a example. ABC is $56.00 with two months of time left, the Bid is $5.4 x $7.8 Ask, soon ABC hit's $56.6 and put my order out STC 16 contracts at $6.7 and they sit even when ABC is trading at $56.90 and soon hit's $57.1, the stock options were $.50 in the money and nobody bought them. I cancelled the order and soon ABC is at $59 Bid is $7.90 x $10.9 and I put the order in at $9.5 and soon ABC hit's $60.1 and my order is still not filled. There was only one point over a two month period I was able to get a tiny bit above intrinsic value, the day before earning someone offered $.20 above intrinsic value $11.90 when ABC was $61.7 and I hit the bid. ABC had a great Q and it moved up $5, I don't regret missing out on another $5.00 with a powerful stock. Is there a Option Price Calculator that discounts all the Greeks coming down as the price of the Option goes up? If I think my stock that's currently at $90 is going to hit $97 while I am on vacation, would you put in your order for $7.00 even though the contracts expire in January 2015? Is there a art to putting the price of Options in that I am missing because I don't understand how stock options can be bought with four months of time and you don't have to pay for Time, Volatility and other Greeks I do not understand. Thanks for your recommendations, there probably is no set rule how to price options because the Market is so crazy, just looking for ideas how to price them. thank you.
I think I know what you are asking, but I'm not sure. Silexx Obsidian is an equity/option platform I'm very familiar with. On the option chain, you can set up your columns. One that I chose here is cTheo and pTheo. These show the theoretical value of the option with the assumptions used. If you make NO changes, that will be the bid/ask average. Across the top middle, you will see DATE, STOCK PRICE, DIVIDEND, INT. RATE, FLAT VOL, VOL. ADJ. If you change the date, stock price, flat vol or vol adjust, it will change the value of the cTheo and pTheo to the expected value with those changes. In the second picture, I changed the date and price to show the new values forward 2 days with SPY trading at 201.00
Thank you, the Black Shoales and Binomial are not even close when I plug them in to Fidelity, OptionX or Etrade's basic price calculator. Thank you for the ideas, I am trying to figure out how to add more JCP Nov $10 and $11 Calls using my own methods, it's empowering to use software you posted and add my idea where the price might hit. Today the BlackShoales Model said my PBR Sept $19s were worth $1.6 when they were trading at $1.1, both the Binomial and Black Shoales are providing weird valuations. Thank you again!