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Anyone have a decent reference cheat sheet for option pricing and which strategy is best to deploy depending on circumstances volatility etc.
Any resources greatly appreciated as some information I find on the internet is factually incorrect. Quite interested in spreads of all types and ratio spreading I know optionvue has some decent info but is it the best software put there for modeelling.
Can you help answer these questions from other members on NexusFi?
Say for instance I am looking for the best strategy when IV is high yet I want to take a directional play in that I believe price is moving down. I would like to be able to profile the different strategies too see the best one from a risk return perspective . generally a bear call spread is better than a bear put spread but I wondering if anyone has modelling software recommendations for this or recommendations ?
Do I get this right: You are asking for a software with which you can model an idea before you implement the strategyy in the market?
Let's say you have an Iron Condor in your head, as the chart shows in your time frame a side way market. Now you want to test how and when you want for example leg in with the call credit spread after you have implemented the put credit spread.
OpVue7 is an excellent tool to test such ideas and offers a lot in that direction. You even can test different kind of synthetic strategies with futures and options. The use of the matrix is a bit complicated and not all tricks are described in the manual when it comes to the point of testing any ideas. Ask for help about this in case you buy the software.
If OpVue7 is of no need for you, you may have a look at the following link which offers some basic tools to model some ideas: Custom Option Strategies
And if this is also of no use, then try to do it with an Excel sheet. You would have to Google for this or there is may some body here in the forum who knows how to develop such an Excel sheet. Here and idea how such a sheet can look: https://i58.tinypic.com/idacqq.png As I did not program it as it was a present from an option pro for me, I have no idea how it is done.
Thanks Stan for that i was wondering from what i read was optionvue was the only tool out there. I will have to download and play around with it.
I guess its all about making the `righter` choices when it comes to option selling etc between strategy and implementation. For me i am looking more at exact R:R for strategy and if im taking the wrong strategy from a R:R it would be better i work it out quicker (for my longterm financial health)!
Can you just input the options you are looking at with option vue and out spits all of the potential strategy R:R or is it custom strategy 1 by 1 ?
You are welcome. Regarding OpVue7: Yes, download it and test it for two weeks. In case you want to buy the software, speak with them and you may even can test it for an extra two weeks.
On the option matrix you see all the strike levels from your derivative you trade. There is a bottom which is called: Format. Here you choose what you want to see as Legend. Choose what ever you like, but choose 'Ex pos' and 'Trade'. Now you choose your strike level and put in the amount of units you want to trade. Then you press "Analyze" and you will have your option strategy picture. Now you can play around with Existing positions and with new legs. This just the absolute basic tools. It would take to much time to explain all steps you can do there.
An other tool you can use is the "Trade Finder". Here you can choose from different strategies in any specific market and you will get a lot of ideas how to implement this strategies. Analyze the results and choose what ever you like.
As told: Test it as much as you can to get a feeling and an idea about the software. If you just want to trade plain credit and put debit and credit spreads in your future option trading and nothing else, it may is a bit too much. If you use a platform from an option broker, you may also will be served by what they offer on there platforms. Check for safety also this possibility. Stan Dan (Sorry about my limited English)
