Options Calculator

This is something you should consider as soon as you have developed some preliminary experience with options trades. Many traders now rely on an options calculator to evaluate a potential trade before they initiate it. These calculators can do a variety of things to help you make an informed decision about a trade. They can estimate the profit or loss in an option trade that would exist for any price of the underlying stock at any time before the expiration date of an option. They can compute the probability of your trade being profitable based on the volatility of the underlying stock.

The most useful options calculators generate a visual image in the form of a risk graph, as seen in Chapter 5, “Risk Graphs”. These risk graphs ...

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