It’s been a busy week and there is also much more work with the simulator as I have expected. I decided to add more features on the way. Apart from that all that small details that you normally don’t think about consume pretty much time and energy, too.

Here’s a small screenshot, everything you see is pretty much self-explanatory. There are a few other dialogs that are switched off right now, I don’t want to show them… yet

There are already a bunch of features. It’s a fun thing to play with, although I didn’t add the main graphical simulation module yet. I can already let this thing calculate chances and possible profits though

You’ll be able to save your simulations, too. Of course.

Alright, back to work! Stay tuned!

A short update: instead of continuing improvements on the straddle calculator, I’ve been working on the Options Simulator for the last couple of days. I feel all excited about its release. It is a pretty powerful tool that lets you analyze and elaborate any option strategy without clouding your mind with complex mathematical formulas nor “greeks” (although tools to calculate these will be provided, too).

Basically you will work with your portfolio/trades and simulate your “arrangements” under different market events/circumstances (which you will define yourself). As a result you’ll get a risk/profit-profile, and a probability calculation (if you wish). Break-even points calculation is provided, too, of course.

The best part of it is that you may add as many options or shares in your portfolio as you want, short or long. This allows you to simulate/calculate virtually any strategy with options that you may find out there… or even better: without getting too deep into financial mathematics, you’ll be able to create visually strategies of your own (and name them with silly names like “double split condor iron spread” hehehe)!

I’m even thinking about providing a tool to finally allow a comparison of two strategies.

There is still a lot of work to be done, the first version for testing purposes will be online within this month though, hopefully .

I have found several new bugs in the graphical output of the “probability box”. These will be fixed shortly. At this very moment I am working on several new improvements in the calculator. I want to add several new features that will make this tool even more handy and powerful.

First of all I need short positions. In many cases (and those of you who do have some trading experience with options will agree) going long with options is to your disadvantage. You have certainly heard that over 80% of all options expire worthless without ever being executed. The reason for this is, that once you understand the probabilities, you can write (go short) with options that look profitable for the buyer, but never get into-the-money. People who write options usually understand the statistics and probabilities pretty well. It takes a pretty dumb and careless trader to write options (maybe even naked ones?) blindly without checking carefully one’s chances.

Anyway, I don’t want to convert this into a rant about dumb trading strategies. I might continue this in another post sometime.

What I was trying to say is this: going short in options is statistically more profitable than going long, because people who go short usually understand options better.

Therefore I decided to add this new feature to the calculator. Instead of going in and out of long positions, I also decided that it would be handy if you could simulate short (and mixed) positions as well.

Secondly I want to add trades of the underlying (short and long) to the simulation. For many option strategies out there you need the underlying in your positions.

So with these new features you will be able to simulate a whole new range of other option strategies. (E.g locking a covered calls in C/R)