Option Calculator

How to Use the Options Price Calculator

This guide will walk you through the steps to use the Options Price Calculator effectively to determine the price and other key metrics of an option. The Options Price Calculator provides valuable insights for both call and put options, with flexibility to customize inputs as necessary.

Step 1: Enter the Current Stock Price

Locate the input field labeled Current Stock Price ($). Enter the current market price of the stock for which you want to calculate the option price. Ensure that the value you enter is numerically positive, starting from $0.01.

Step 2: Enter the Strike Price

Find the input field labeled Strike Price ($). This is the price at which you have the right to buy or sell the stock if the option is exercised. Enter a positive value of at least $0.01.

Step 3: Input the Days Until Expiration

The field labeled Days Until Expiration requires the number of days until the option expires. You should input a whole number between 1 and 1,825, as options can have varying expiration periods.

Step 4: Specify the Implied Volatility

In the Implied Volatility (%) field, enter the stock’s annual volatility expressed as a percentage. Valid inputs range from 0.01% to 200%. This metric captures the market’s view of the likelihood of price changes.

Step 5: Provide the Risk-free Interest Rate

Input the prevailing Risk-free Interest Rate (%) in the market into the designated field. This should be a percentage ranging from 0 to 20%, reflecting the return on risk-free investments like government bonds.

Step 6: Choose the Option Type

In the Option Type dropdown menu, select either Call Option or Put Option to determine the focus of your calculation.

Step 7: Review the Calculated Results

Once all fields are populated, the Calculator will provide you with the results for the following parameters:

• Option Price: This is the calculated price of the option, displayed in USD with two decimal accuracy.
• Delta: It indicates how much the option price is expected to move when the stock price moves by $1, formatted to four decimals.
• Theta (per day): This value shows the sensitivity of the option’s price to the passage of time, expressed in USD with four decimal precision.
• Gamma: This metric reflects the rate of change in Delta per $1 change in the underlying asset’s price, provided with six decimal accuracy.
• Vega: It measures the change in the option’s price with a 1% change in volatility, also expressed in USD to four decimals.

Utilize these calculated metrics to make informed decisions regarding your options trading strategies. Repeat the steps as needed to evaluate different scenarios by adjusting the input values.