This section shows how to input and save an option trade using the Optionetics Platinum web site. Sometimes an option trade comes from an outside source. This source could be your broker, a news article, or a stock options newsletter. Stockfinder is an example of a trading advisory service you can purchase for trade recommendations. More information and subscription prices are available by calling:

Global Publishing Corp.
Subscriptions: (888) 366-8264 (Pacific Time 9-5:30).
Fax: (650) 378-8320 Email: optionetics@hotmail.com

You received a recommendation on June 1, 1999 to buy a " bull call spread" for QUALCOMM, Inc. We will enter this trade, analyze it, and backtest it using the Optionetics Platinum Stock Site web tools. As we all now know, QUALCOMM was one of the big movers in the 99 tech rally.

To follow along:

• Log in to the Optionetics Platinum stock options site by entering your user name and password on the Optionetics Platinum Login page.
• Click the Enter button to load the Optionetics Platinum Welcome page.

The primary inputs and buttons on the Welcome page are shown below. As you use the Optionetics Platinum site, you often have to return to the Welcome page to navigate between Optionetics Platinum tools using these buttons.

We want to enter an option trade that occurred in the past:

• Select a date from the date list on the online Optionetics Platinum Welcome Page.
• If your desired date is not an option:
  • Click All Dates or
  • Click My Personal Data and change the "Access from date" to the furthest date you can find in My Personal Data
  • Click Save and Exit.
• Once you change the "Access from date" all date selections in Optionetics Platinum start from that date. The "Access from date" slides one day forward as each day goes by to keep up with the "Access to date". If you want to enter an option trade using the latest date, leave the default date in the date selection at its default value.
• Return to the Welcome page.

The date used for this example is: 06-01-99.

If you know the stock symbol for Qualcomm:

• Enter it in the stock text box below Stock Symbol.

If you don't know the stock symbol;

• Enter the first few letters of the stock name, such as qu, in the text box under stock symbol and click "Search" to the left of the text box. Look at the table that results at the bottom of the Welcome page after you click the search button. QUALCOMM, Inc.'s stock symbol is QCOM.
• Enter it in the stock text box.
• Click "Create An Option Trade" which will take us to the Risk Graph web page.

The Risk Graph web page has all the tools and graphics capability needed to enter and analyze an option trade.

A Bull Call Spread is composed of two option trades. The first is a long (or buy) call at a strike price near the current closing price of the stock. The money we pay for the long call is the only money we risk in the trade. We start making money if the stock goes up past a break-even point, and there is no upper limit. We loose money if the stock goes down below break-even, but it is limited by the cost of the trade.

The second trade in the Bull Call Spread is a short (or sell) call at a strike price higher than the long call. We receive a premium to short the call. The premium lowers our total trade costs. As the stock goes up, above the second trade's strike price, we loose money. The loss is counteracted by our long call, which is worth more. The net result is a finite profit for stock prices above the second trades strike price and a lower, but finite loss, for stocks below the first trades strike price. We are spread between a long and short call and slightly bullish. This means we require the stock to move higher than its current values to make a profit.

The short call may get assigned if the stock moves high enough. However, you are almost certainly going to make a profit and one that is usually close to the Max profit if the short call is assigned, since you will correspondingly close out your long call and pocket the difference. In our case, Qualcomm closed near 94 on the date we want to purchase our trade. We will buy a 90 OCT99 call at 20.25 and sell a 130 OCT99 call at 7.12. Our net costs will be 20.25-7.12 = 13.13 ($1313) and represents the most we can loose on the trade.

The short call will not get assigned if the stock goes down in a Bull Call Spread. This is in contrast to the Bull Put Spread. The upside and downside profit and losses of a Bull Put Spread are similar to a Bull Call Spread, but the short put can get assigned when the stock goes down. An assignment in a Bull Put Spread causes you to have the close the trade, at a loss, and you cannot wait to see if the stock will go back up if there is any time left to expiration.

There are two ways to load a new trade directly into the Risk Graph analyzer. We will show both approaches. If you go towards the middle of the page, you will see the inputs shown below

If you did not know the option price, you can select @Market Price. When you click Update Option Trade, the web site will grab the closing prices as the bid or ask price that day and make it your purchase price.

We know the option trade prices, so we:

• Select Purchase Price and enter them in the text box.
• Click Update Option Trade. The option prices will not change

The web site must use an option price when you do option searches. You can choose how these prices are found in Create A Search. The split between the bid and ask is one way. If you find a trade you like, you will have to go out into the trading world and attempt to get the option to fill with the prices you found to be desirable. Your option trade purchase prices will usually be different from yesterday's closing prices. You must update the option trade on the web site with the option purchase prices you paid your broker.

You can have the risk graph analyzer online, and if you use a web site options broker, such as Preferred Trade, you can see the new bid and ask prices as they evolve in time.

• Enter these close to real time prices in the risk graph web page Purchase Price text boxes.
• Click Update Option Trade.

The risk graph web page will show you the trade profits and losses for the prices you are submitting for the option trade.

• Change the selection to Oct99. The selection after Use is the option strike month selection for the strategy table.
• Checkbox "Call Vertical Spread" under Low IV, Bullish in the option strategy table below the "Use:" selection. You could also select Checkbox "Call Vertical Spread" under the High IV Bullish strategy. Either type of implied volatility will do, since we are buying and selling an option. We want a low IV for the long call option and a high IV for the short call option. We are bullish, since we want the stock price to go up after we enter the option trade. The Low IV trade is chosen, since this provides the maximum gain for a bullish run. We are choosing a strategy that will become profitable if the implied volatility or the stock price goes even higher than it is now.
• Click on "Update Option Trade" at the bottom of the risk graph web page just below the strategy table. This causes the web site to load a prospective trade with internally determined strike prices and market value option prices. This proposed web side default trade has no optimal strategy ranking. It's simply a trade that matches the option strategy matrix combo settings you checkboxed.

The Risk Graph web page will update after you click on "Update Option Trade". Once it updates you will see the option risk graph and a box where you can alter the web site's graph values. The box and a risk graph are shown below. The graph y-axis is the stock price. The web site finds the maximum and minimum stock values and uses these values to set the y-axis scale. This is usually not good enough. (A future upgrade is to improve the default y-axis scale limits). Change the plot y-axis

• "Upper" text box to 150 and the y-axis "Lower" text box to 50.
• Click Update the Chart.

Further down the page you will find the long and short call components of the trade.

Change the Long Oct99 Call strike from what should be 95 on the web page to the desired value of 90.

Click into the text box, backspace out 95 and type in 90.

Below the Long Call is the short call option trade:Change the Short Oct99 Call strike from what should be 140 to 130.

Change the Call "Purchase Price" option to "Market Price" option in both cases.

In the prior trade we entered the purchase price, but in this trade entry we will let the web side find and insert the purchase prices. When you change the option trade and you do not also change the Purchase Price, you must allow the web site to alter the Purchase Price by selecting the Market Price radio button. If you leave it at Purchase Price (the default radio button), the web site will use that price, which will likely to be incorrect.

Click on "Update Option Trade" just above the trade values.

After the web site reloads:

Click on "Save Option Trade" at the bottom of the web page

We paid $2025 for the long call and received a credit of $712 for the short call for a net price of $1313. Our Max loss possible is $1313 (the cost of the trade), and our Max gain is close to $3000. We will exit after we have a profit of double our risk. For example, a profit of $2600. When the web site shows a profit, you keep this money as profit. Hence, profit is initially shown as 0.0 when you enter the trade, because you could immediately sell the trade and get your $1313 back.

After clicking "Save Option Trade" the web site will bring you to the "Edit My Trades" web page. In Edit My Trades: :

1. Make sure the Multiple Day Analyzer Start date is the one you selected.
2. Change the Multiple Day Analyzer End date to one in the future such as 10-15-1999 in this example.
3. Click on Multiple Day Analysis
4. Click the browser back button when you are ready to come back to "Edit My Trades"

The multiple day analysis result appears as shown below for the dates we have used.

Hit BACK on your browser to return
Date        Stock   ATM IV     Quote    MQuote      Profit     MProfit
06-01-99  93 15/16   72.9%    11 7/8        12 $   -125.00 $   -111.08
06-02-99    98 7/8   69.9%    12 7/8    13 5/8 $    -25.00 $     47.72
06-03-99  102 1/16   70.0%        14  14 11/16 $     87.00 $    153.72
06-04-99 109 15/16   69.3%    16 3/8   17 5/16 $    325.00 $    418.59
06-07-99  109 9/16   69.3%    16 3/8    17 1/4 $    325.00 $    410.85
06-08-99   104 7/8   68.3%    15 1/4  15 11/16 $    212.00 $    256.18
06-09-99   109 1/2   68.3%    16 1/2   17 5/16 $    337.00 $    415.63
06-10-99   110 3/4   67.8%    16 7/8    17 3/4 $    375.00 $    464.65
06-11-99   108 3/4   68.1%    16 3/8   17 1/16 $    324.00 $    393.85
06-14-99   102 3/4   68.5%    14 3/8        15 $    124.00 $    184.04
06-15-99 113 11/16   68.8%    18 1/8  18 11/16 $    499.00 $    558.85
No QAQ option data 2 for 06-16-99!
06-17-99 119 15/16   70.5%    19 7/8  20 11/16 $    674.00 $    755.01
06-18-99   129 3/4   72.7%    22 3/8   23 5/16 $    925.00 $   1019.48
06-21-99   130 1/2   72.8%    22 3/4    23 5/8 $    962.00 $   1052.22
06-22-99   130 5/8   73.9%    22 5/8   23 9/16 $    950.00 $   1041.61
06-23-99   133 7/8   74.0%    23 3/8    24 1/2 $   1025.00 $   1136.28
No QAQ option data 2 for 06-24-99!
06-25-99   126 3/4   72.1%        22  22 13/16 $    887.00 $    970.56
06-28-99   134 1/2   73.0%        24        25 $   1087.00 $   1187.73
06-29-99       137   72.2%    24 7/8    25 7/8 $   1174.00 $   1272.38
07-01-99   139 3/4   71.4%    25 3/4  26 13/16 $   1261.00 $   1365.53
07-02-99   144 1/4   71.0%    26 7/8   28 1/16 $   1374.00 $   1494.84
07-06-99   142 1/4   71.9%    26 5/8   27 9/16 $   1349.00 $   1444.30
07-07-99  139 7/16   72.1%        26    26 3/4 $   1287.00 $   1358.98
07-08-99   142 1/4   71.9%    26 3/4  27 11/16 $   1362.00 $   1455.01
07-09-99   148 3/4   71.9%    27 1/4   29 3/16 $   1412.00 $   1606.40
07-12-99  147 7/16   71.0%    28 3/8    29 1/4 $   1524.00 $   1614.55
07-13-99   144 3/8   70.7%    27 5/8  28 11/16 $   1449.00 $   1555.40
No QAQ option data 2 for 07-14-99!
No QAQ option data 2 for 07-15-99!
No QAQ option data 2 for 07-16-99!
07-19-99 158 11/16    6.3%        NQ    39 1/2 $        NQ $   2639.07
07-20-99 162 15/16    4.6%        NQ    39 1/2 $        NQ $   2639.61
07-21-99   156 5/8   30.7%        NQ    38 5/8 $        NQ $   2550.50
07-22-99   150 1/2    7.9%        NQ   39 9/16 $        NQ $   2640.69
07-23-99 154 11/16    8.5%        NQ   39 9/16 $        NQ $   2641.24
07-26-99   152 5/8   25.3%        NQ        39 $        NQ $   2587.20
07-27-99   154 3/8   10.0%        NQ   39 9/16 $        NQ $   2643.40
07-28-99   159 3/4   45.0%        NQ    37 1/4 $        NQ $   2412.75
07-29-99   156 3/8   24.7%        NQ   39 5/16 $        NQ $   2615.92
07-30-99       156   16.5%        NQ   39 9/16 $        NQ $   2643.16
08-02-99   152 1/2   22.8%        NQ   39 5/16 $        NQ $   2617.33
08-03-99       140   73.4%        NQ   28 9/16 $        NQ $   1544.44
08-04-99  142 7/16   11.3%        NQ   39 9/16 $        NQ $   2642.12
08-05-99  143 3/16   15.1%        NQ    39 3/8 $        NQ $   2627.11
08-06-99   147 3/4   16.7%        NQ    39 1/2 $        NQ $   2636.92
08-09-99  147 7/16   14.5%        NQ   39 9/16 $        NQ $   2645.88
08-10-99   147 5/8   15.8%        NQ   39 9/16 $        NQ $   2643.72
08-11-99   149 3/4    6.1%        NQ    39 5/8 $        NQ $   2651.54
08-12-99       151    9.1%        NQ    39 5/8 $        NQ $   2652.08
08-13-99       160   37.8%        NQ  38 13/16 $        NQ $   2565.78
08-16-99   161 3/4   43.3%        NQ    38 1/2 $        NQ $   2537.28
08-17-99  173 1/16   43.7%        NQ   39 3/16 $        NQ $   2604.14
08-18-99   166 1/2   28.5%        NQ    39 5/8 $        NQ $   2648.26
08-19-99   164 3/4    8.1%        NQ  39 11/16 $        NQ $   2655.89
08-20-99 174 15/16   39.7%        NQ    39 1/2 $        NQ $   2634.33
08-23-99  183 7/16   35.5%        NQ  39 11/16 $        NQ $   2654.99
08-24-99       179   41.3%        NQ   39 9/16 $        NQ $   2643.33
08-25-99       190   42.3%        NQ  39 11/16 $        NQ $   2653.23
08-26-99   190 3/4   43.1%        NQ  39 11/16 $        NQ $   2653.84
08-27-99   183 3/4   44.3%        NQ    39 5/8 $        NQ $   2647.07
08-30-99       183   56.0%        NQ   39 5/16 $        NQ $   2618.80
08-31-99  192 3/16   54.0%        NQ   39 7/16 $        NQ $   2631.55
09-01-99 168 11/16   63.7%    35 7/8    38 1/8 $   2274.50 $   2499.97
09-02-99   167 1/4   63.6%    36 7/8   38 1/16 $   2374.50 $   2494.68
09-03-99   163 3/8   61.3%        NQ        38 $        NQ $   2485.91
09-07-99 165 13/16   63.6%    37 1/8    38 1/4 $   2399.50 $   2512.82
09-08-99   167 7/8   63.6%    37 3/8   38 9/16 $   2424.50 $   2541.80
09-09-99   166 1/8   62.2%    37 1/2   38 9/16 $   2437.00 $   2543.13
09-10-99 165 11/16   60.1%    37 5/8    38 3/4 $   2449.50 $   2562.53
09-13-99   153 3/8   63.7%    36 1/8    37 1/4 $   2299.50 $   2409.05
09-14-99   170 1/2   61.7%        NQ   39 3/16 $        NQ $   2608.45
09-15-99   173 7/8   62.1%        NQ    39 3/8 $        NQ $   2625.38
09-16-99   179 7/8   61.9%        NQ   39 7/16 $        NQ $   2630.39
09-17-99 189 15/16   60.3%        NQ  39 11/16 $        NQ $   2653.63
09-20-99       188   48.9%        NQ    39 7/8 $        NQ $   2672.28
09-21-99  182 5/16   73.3%        NQ    39 1/2 $        NQ $   2634.62
09-22-99   190 1/8   61.8%        NQ  39 13/16 $        NQ $   2669.05
09-23-99   186 5/8   54.7%        NQ    39 7/8 $        NQ $   2672.85
09-24-99   189 1/2   51.8%        NQ    39 7/8 $        NQ $   2674.90
09-27-99  193 5/16   42.1%        NQ    39 7/8 $        NQ $   2677.15
09-28-99   193 5/8   61.2%        NQ    39 7/8 $        NQ $   2676.99
09-29-99   187 3/4   86.1%        NQ  39 11/16 $        NQ $   2657.52
09-30-99  189 3/16   88.9%        NQ    39 3/4 $        NQ $   2660.27
10-01-99 186 13/16   79.8%        NQ  39 13/16 $        NQ $   2671.22
10-04-99   189 7/8   58.4%        NQ  39 15/16 $        NQ $   2680.94
10-05-99   194 3/4   57.6%        NQ  39 15/16 $        NQ $   2681.52
10-06-99  204 5/16   96.3%        NQ  39 15/16 $        NQ $   2681.12
10-07-99  200 9/16   29.1%        NQ  39 15/16 $        NQ $   2682.62
10-08-99 213 15/16   89.9%        NQ  39 15/16 $        NQ $   2683.15
10-11-99   222 1/2  110.9%        NQ        40 $        NQ $   2684.81
10-12-99  212 1/16   57.8%        NQ        40 $        NQ $   2685.36
10-13-99   204 3/8   57.9%        NQ        40 $        NQ $   2685.90
10-14-99       204   50.2%        NQ        40 $        NQ $   2686.45
10-15-99   198 1/2   57.2%        NQ        40 $        NQ $   2687.00

QUALCOMM, a technology stock, increased in price dramatically throughout most of 1999. We reached our profit goal by 07-19-99. QUALCOMM continued to rally, and we reached Max profit before expiration.

A saved trade can be analyzed at any future date, including today's date, if the trade is still active. The saved trade is always in the users account until deleted.

Go back to the Optionetics Platinum Welcome web page. In the Welcome Page:

Change the date to the one desired.

Click on "Edit My Trades".

Click on the "My Risk Graph" button in Edit My Trades and the new analysis will appear for the saved trade. The QUALCOMM trade from creation to 09-15-99 is shown below.

Note how the probability and odds change to show the trades profit status on 09-15-99. The odds of success are high with 20 days left to go, because it is very unlikely that the stock will move such that you will loose money. The web site continues to predict how much money you will make or lose as time goes by and conditions change.

If you have an option trade that is currently active or have made an option trade in the last 2 years, we recommend you enter it on the web site, as described above, and do a backtest to see how the Optionetics Platinum web site can help you analyze your option trade.

You can change the name of the trade after you have saved it.

• In "Edit My Trades":Click on My Matrix next to the trade.
• On the page that loads: Change the option trade name displayed in the text box.
• Click the Save button at the bottom of My Matrix.
• Click the button below that to return to Edit My Trades.