| The Option Price Visualizer is a tool which allows you to plot how the price of an option changes with respect to changes in the price of the underlying stock. |
Why Use It
The tool can be helpful in devising trading strategies, where you which to quickly determine what the price of an option will be at a specific point in time (such as the open or close of the stock market), based on the likely range of values of the underlying stock at that point.
How to Use It
Configure the option: Enter the Strike price for the option, the Implied Volatility (or IV), and the number of Days and Hours left from now until expiration.
Alternatively, press to load the Option Picker, which will allow you to select a specific option strike from the available stocks and expiration dates and calculate IV and the Days and Hours to expiration automatically.
Set the range: Enter the Start and Stop price for the underlying stock. The option price will be calculated for each price in the range. You can enter a Step other than $1, to plot the option price at intervals of less than or several dollars.
Press the button to generate the plot.
How It Works
The tool utilizes the Black-Scholes model to compute the price of the option for each of the price of the underlying option within the specified range.
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