I have just fixed a bug with the “expiration”. When you changed the expiration, the Black-Scholes model did not update correctly the fair option prices. Now it does. Sorry for inconveniences

In the straddle calculator you’ll find a required field named “ratio” under Calls and Puts.

Ratio means the “amount of options needed to buy one unit of underlying“. Especially in European Options you may find different ratios (the most common are 10 and 100 though). So if you decide to buy options for 100 shares of a stock XYZ and you know that you need ten options to be able to buy one share, you’ll have to enter 10 in this box.

Since its first day online the straddle calculator has attracted dozens of thousands of people willing to learn about the straddle and the strangle strategies. The overwhelming response persuaded me to give this site a whole new purpose. As you may observe - now this is a blog.

The online calculator itself is not really gone. I developed a whole new version of the Straddle/Strangle Calculator (or Simulator) . Now it works directly on your home PC, without the need to go online. Any of the latest Windows versions should do. The new calculator is more flexible, can do more and more fun to experiment with. Break-even points, maximal loss, expected profit, Black-Scholes option pricing and other features are included within this software. You may find the complete description here.

The purpose of this site will still be to deliver software that makes it easier to develop strategies in financial markets – strategies that rely on options (and other warrants) as risk-hedging and profit-maximizing tools. In my posts I will show you how to use these tools to analyze your option strategies.

I already want to announce the development of the Risk Profile Simulator which will give you dynamically insights about your risk/profit at any point of time. You’ll be able to introduce your trades and watch how your risk/profit changes dynamically under different circumstances. In a way it will be the big brother of the straddle/strangle calculator. Keep tuned!

At this point it is my responsibility to warn you about the risks of options trading. Options are a powerful financial instrument that, as fire, may serve you or burn you… financially. I recommend to conduct a deep research before you go anywhere near a trade with options. To protect me against any legal responsibility I strongly recommend NOT TO USE my software for any decisions in your real trades. This software serves educational/academic purposes only!

Now, I will also use this blog to share my experiences and know-how in option trading strategies. I may also share about how to analyze companies. I expect you to be at least somewhat fit in finances. Still, I like to keep things simple, so anyone can understand what we are talking about.

Keep tuned for the next posts!