Option Strategy Payoff Calculator

Payoff charts, break-even points and risk-reward ratios for 54 strategies. Great way to learn options.

Option Strategy Simulator

Aggregate Greeks, what-ifs, volatility skew, and more advanced option strategy modelling. Also intraday.

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Free Tutorials

Options: The Basics

Basic Option Positions

Option Pricing and Greeks

Volatility

VIX (CBOE Volatility Index)

Statistics

Technical Analysis

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Options 101: Beginner Tutorial

If you are new to options, this page can be used as a beginner tutorial, guiding you through the basic terms and concepts. These are not only essential for successful options trading, but also needed for understanding more advanced topics such as option pricing, volatility, Greeks, or option strategies. Summary / Reference Options Basics: Overview [more…]

Working with Time to Expiration in the Black-Scholes Calculator

This page explains how to enter the time to expiration input in the Black-Scholes Calculator either as number of days or as valuation and expiration date and time, and how to set up charts modeling the effects of passing time on option prices and Greeks. Entering the Time to Expiration Input For option prices and [more…]

Black-Scholes Time to Expiration Input

This page explains the time to expiration input in the Black-Scholes option pricing model. We will discuss which time units to use, how to work with fractions of days, how time enters the formulas, and how it affects the resulting option prices. Time to Expiration in the Black-Scholes Model Options have limited life and the [more…]

Long Call vs. Short Put Differences and When to Trade Which

This page explains differences between long call and short put option positions. Using an example, we will compare their cash flows and payoff profiles. We will conclude with recommendations when to trade which strategy. What Long Call and Short Put Have in Common Long call and short put are among the simplest option strategies, each [more…]

Can an Option’s Intrinsic Value Be Negative?

Short answer: No. Intrinsic value of an option can’t be negative. It is positive for in the money options. It is zero for out of the money options. It can’t be lower than zero, due to the very nature of options – the option (choice) to act (exercise) only when it’s profitable to you. Let’s [more…]

Working with Strike Price in the Black-Scholes Calculator

This page demonstrates how to enter the strike price input in the Black-Scholes Calculator and how to draw charts showing effects of strike selection on option prices and Greeks. Entering Strike Price Input Strike price is one of the six inputs required for option price calculation under the Black-Scholes model (the others are underlying price, [more…]

Black-Scholes Strike Price Input

This page explains the strike price input in the Black-Scholes option pricing model and the effect of strike selection on option prices and Greeks. Strike Price as Black-Scholes Input The Black-Scholes option pricing model takes five inputs which determine the values of call and put options. These inputs are underlying price, strike price, time to [more…]

Working with Underlying Price in the Black-Scholes Calculator

This page explains how to enter the underlying price input in the Black-Scholes Calculator and how to set up charts modeling the effects of underlying price on option prices and Greeks. Entering Underlying Price Input In order to calculate option prices, you need to set all the inputs for the Black-Scholes option pricing model: underlying [more…]

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