It shows how your P/L diagram will look like in 1, 2, .... trading days in the future, up until the first expiry.
got it . I want to go one extra step and graph an overlay of current PnL vs MAX at exp ( based on change in vols) on the same screen. I want to use it for possible early exits if current PnL is close to MAX. How diff would be develop this , in your opinion ?
Seems he canât do it. You can start any combo by setting your overall volatility, calculate theoretical prices, view your P/L graph and then adjust vol to see the graph change. OR: you can start with real prices, calculate their respective IVâs, and here it comes: then examine future P/L/ graphs based on adjusting ONE overall volatility. (Compare: you can adjust each legâs strike separately, but not its vol.) As I wrote earlier: I just donât see how this is done. So one leg today has IV 120, another has 80, and then we examine future P/L based on vol 90. How would the program handle this? Do all IVâs suddenly agree on 90 as from tomorrow? Lineary approach 90 toward expiration? Does anyone know? How can you sensibly analyze especially a calendar if you canât set different IVâs? basis perhaps? Youâre a 12-year pro, Iâm a 3-year amateur. No tease, Iâm seriously interested and perhaps missing the obvious. Note: I still didnât buy it, IV_Traderâs remark held me back. My conclusion is based on online demo http://www.hoadley.net/options/demos.aspx under âsensitivity analysisâ.
You're foolish to let what iv trader says hold you back. It is staring you in the face. Look at the sheet in the demo and see the column called "Implied Volatility". You can change the IV for each option in that column. You can also download the free strategy evaluation tool and see it firsthand.