Options Calculator

The Options Price Calculator assists users in determining the theoretical price of call or put options and provides various Greeks, including Delta, Gamma, Theta, Vega, and Rho, based on their inputs regarding stock price, strike price, time to expiry, risk-free rate, and volatility.

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How to Use the Options Price Calculator

The Options Price Calculator is a tool designed to help you compute the price and various sensitivities of options using specific financial parameters. Below is a step-by-step guide to effectively using this calculator.

Step 1: Enter Input Data

Start by filling out the required input fields in the calculator. Each field is crucial for accurately calculating the option price and its sensitivities.

  • Current Stock Price ($): Enter the current market price of the stock. The input must be greater than or equal to $0.01 and should match the specified step of $0.01.
  • Strike Price ($): Input the strike price of the option. This value must also be at least $0.01, with increments of $0.01.
  • Time to Expiry (Days): Specify the number of days until the option expires. The allowed range is from 1 to 1095 days and should be entered as a whole number.
  • Risk-Free Rate (%): Enter the current risk-free interest rate as a percentage. Acceptable values range from 0% to 100% in increments of 0.01%.
  • Volatility (%): Specify the expected volatility of the stock as a percentage. Input values between 0% and 200%, with a 0.01% step.
  • Option Type: Choose either ‘Call Option’ or ‘Put Option’ from the dropdown menu. This selection will affect the type of option being calculated.

Step 2: Compute Results

Once all the required inputs are provided, the calculator will automatically generate the corresponding results. You will find the following outputs:

  • Option Price: The price of the option, calculated using the given parameters and presented in USD. This figure is formatted to two decimal places.
  • Delta: Represents the sensitivity of the option price to a $1 change in the underlying stock price. It’s expressed as either 1 or -1, formatted to four decimal places.
  • Gamma: Shows the rate of change of delta per $1 change in the stock price, simplified to a constant value of 0.01, and formatted to four decimal places.
  • Theta: Displays the sensitivity of the option price to a one-day decrease in time to expiry. This value is presented with a currency format in USD, to four decimal places.
  • Vega: Reflects the sensitivity of the option price to a 1% change in volatility, fixed at 0.001, and displayed to four decimal places.
  • Rho: Demonstrates the sensitivity of the option price to a 1% change in the risk-free rate, with a constant value of 0.001, formatted to four decimal places.

Step 3: Analyze the Results

Review the calculated values and analyze the option price and its sensitivities. These results provide insights into how changes in the market and input parameters might affect your option’s value.

With this detailed information, you can make informed investment decisions regarding buying or selling options based on their current and projected pricing behaviors.