How to calculate the intraday expected move for 5 ~20 mins theoretical price of an option?

Discussion in 'Automated Trading' started by Erick Gomez, Oct 16, 2015.

  1. Hi,

    I am trying to calculate the expected move for an intraday trade for a long position in Puts or Call. My strategy can tell me the expected move in the underlying but I am not sure what it is the best way to calculate the option price. I am assuming the following, maybe somebody can correct me

    1) Calculate the premium/price of the option with Black Scholes. However this might be challenging to code because i need to get the variables for the implied volatility and the interest

    2) Can I assume that the price of the expected strike can be preserved in 5~20 mins for at least in 80% of the time?

    3) Buy the option with a high Delta so I can calculate my expected price to sell