How To Enter Stock Option Calculations Correctly into the Calculation Program!
In order for the calculation program to correctly calculate your stock option pricing data, you will need
to understand how to enter the data into the entry fields correctly. I've provided a "Help" screen in the
program, but listed below are more specific details about how you should enter the data so that when you
use some of the other features the presentation of your figures and data will look great!
Start the Calculation
Program and bring up the Stock Options Calculation screen.
1. Enter the Stock Option Description in the "left side" entry field under "Call Option Description"
of the screen. The format that you should use is: Stock Symbol (Ex "BAC" for Bank-Of-America), the 3 character
abbreviation for the Month (Ex. MAY), the Strike Price of the Stock Option (Ex. $11), and the Date (Ex. 05/06/09).
All of that together should look like this: "BAC MAY 11 CALL 05/06/09". Press the "TAB" key to get to the next
required entry field.
2. Enter the "Stock Option Symbol" in the entry field under "Call Option Symbol". (Ex. BYOEK). Press the "TAB" key to get to the next
required entry field.
3. Enter the "Premium Price Paid". (Ex. 1.45). Press the "TAB" key to get to the next
required entry field.
4. Enter the "No. of Contracts". (Ex. 10). Press the "TAB" key to get to the next
required entry field.
5. Enter the "Projected Premium Price". (Ex. 2.00). Now, press the "Enter Key" or click on the Calculate Button to
instantly see the calculated results, the data on the right side "Sell To Close Projections" will be updated also.
You can modify the description field on the right side (under "Sell To Close Projections") with the correct Date of when
you close out the position. After you have finished entering your calculation numbers and adjusting your price figures,
always press the "Enter Key" (or click the Calculate Button) to ensure your figures are finalized, select
the "SAVE" button to save those figures to your hardrive.
You will notice some of the entry fields are "grayed out" and not available to update. The calculation program handles
all of the calculations, so there's no need to update those fields -- saves time and effort!
The "Reg. Fee" fields are small SEC FEEs that are now charged on all BUY and SELL Stock Option transactions (usually it's
just a few cents, depending on how many stock options you bought). You will see the exact fee numbers in your Activity or History
statement when you complete the transaction, but for now you can enter 0.06 (for the left side) and 0.12 (for the right side)!
Press "Enter" again to recalculate.
When you first started the program you were required to setup a brokerage commission rate before the program could continue.
The reason for this was to "automate" the commission calculation for you instead of you having to figure it out! But, you can
"override" the commission calculation numbers by "clicking your mouse-pointer" over the checkbox next to the word "OVRD". This will allow
you to manually change the "Est. Total Commission rates" if needed, and the program will use the numbers that you enter (on both sides) instead
of the default commission rate that you initially set. Sometimes you will need to do that, so that's why I've provided that function!
The same process is done for "PUT" Options, and the screen will change the wording automatically when you select "PUT Option Calculations" so you
will know which type of option you are currently working with.
Here's the actual screen shot of the scenario we just went through!
If you have any problems or questions, just send me a email and I'll be happy to answer as quickly as I can!!
Jimmie V. Smith Jr.
markettrading@juno.com
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© 2006 Market Trading Technologies - Simple Market Trading Software Tools developed
by Jimmie V. Smith Jr., All Rights Reserved
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