Paperless Calculation:
Forget the pain of writing down different formulas and calculating your option trade. Just enter your details and get your options trade result.
Options Calculator
What is an Options Calculator?
An option calculator is an arithmetic calculating algorithm that helps option traders to predict & analyse their trade. The option calculator is based on the Black-Scholes Model based on variables such as the strike price, underlying assets, type of option, volatility, risk-free rate and expiry date.
To calculate the value of option premium or implied volatility you can use this option trading calculator.
But before, getting into much detail you need to know about the option contract. An option contract gives the right but not obligation to the trader to buy or sell financial assets which are bound in the option contract.
There are two types of options contracts which are the call option and the put options..
In call options the owner gets the right not compulsion to buy the stock which is mentioned in the option contract.
Whereas in the put option the owner gets the right not compulsion to sell the stocks which is mentioned in the contract.
As a financial product, option contracts offer multiple advantages such as leverage, low capital requirement, portfolio diversification, risk & rewards etc. Before investing in any financial product you must evaluate whether the risk you are going to take is worth it or not.
How is Options Price Calculated?
Consider an example of TCS Wed Mar 29 2023 with a strike price of 2500.
Enter the conditions and you can check the expected Call P&L and Put P & L on reaching the target of 2800
Following days to expiry is 9 days
| Call | Put | |
|---|---|---|
| Expected Price | 300 | 0 |
| LTP(Premium) | 0.00 | 0.00 |
| Buy P&L (Lot - 175) | Rs.52500.00 | Rs.0.00 |
| Sell P&L (Lot - 175) | Rs. -52500.00 | Rs.0.00 |
Option's Underlying Price
Our option calculator provides proper value & calculation and it follows the option contract condition which is set in the Indian stock market. According to the volatility of the current market and previous trading day, you can use the option trading calculator by adding the accurate value of your option trade . You also need to note that the option’s underlying price is the previous trading day’s market closing price.
Benefits of Options Value Calculator
Easy Method:
With Share India option calculator you get a clean UI along with minimum inputs of trade. Try the option trade calculator which is simple and easy to track with the stock market.
Improve your trade:
Investing with a goal & plan will help traders in many ways. Calculating the option price calculator lets you trade with an intuitive approach in the option trade.
Explore more:
There are various options such as strategy deck, option chain, open interest etc to explore. Increase your trading knowledge by using these tools by Share India.
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Frequently Asked Question about Options Calculator
An option contract is a financial contract which offers the buyer a right not compulsion to buy or sell an asset on a specific asset at a particular price which is called strike price on the expiry date of the option contract.
The delta is an amount in option price which is expected to move based on a one rupees change in the underlying assets. Calls have positive delta between 0 and 1. And if the stock price rises then the other pricing variables remain constant, and then the price for call will go up.
The gamma in option contract refers to the rate that delta will change based on one rupees change in the stock price. So suppose if delta is the speed at which option price changes, gamma is the most responsive to changes in the price of an underlying asset.
A strike price refers to the agreed price at which the option contract owner has the right to buy or sell the shares which are held in the financial contract.
Globally, there are two types of option contracts: the European option and the American option. In European option contracts the owner can exercise trade only at the expiration date. But in the American contract the option contract owner can exercise the trade anytime before or the expiration date of the contract. In India, the option contract is based on the European option.
The values are theoretical estimates. Actual market prices may vary depending on negotiation, supply/demand and other risks. But in general, the values give a reasonable baseline estimate.
Here are some of the common use of an option price calculator:
- To estimate a fair purchase or sale price for an option
- Gauge sensitivity to risk factors like volatility
- Determine break even points for various options strategies
- Model potential profit/loss scenarios for an option trade
An option value calculator is a tool that estimates the fair value of an options contract based on inputs like underlying stock price, strike price, time to expiration, volatility, and interest rates. It uses models like Black-Scholes to calculate the theoretical value.
Key factors include: underlying asset price, strike price, time to expiry, volatility, interest rates, dividends paid on the underlying asset.
Disclaimer
The option calculator is a tool for indicative purposes only. It is to assist your trade. For investment you need to do your own research & analysis and invest accordingly. Share India does not take any responsibility/liability nor does it undertake the authenticity of the figures calculated in the following calculator.
We at Share India aim at transforming the millennial trading experience through a cutting-edge fintech platform. We strive to provide the best value for money trading solutions by incorporating Artificial Intelligence and Machine Learning technology.
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Investment in securities market are subject to market risks, read all the related documents carefully before investing.