A simple tool on the Optionetics Platinum web site to find trades is the "Quick Search" button on the Welcome Page. The "Quick Search" button is a set of prestored Create A Search settings. This help file describes the Quick Search button options and walks through a trade that occurred in the past.

The Optionetics Platinum web site allows you to store lists of stocks online. If you log off and return to the Optionetics Platinum web site, your personal lists of stocks will still be there. You can store a list of stocks in Chg my Stk List. The My Stock list group of stocks will appear at the top of your Welcome Page for quick access. The other key feature of My Stock List is that no other Optionetics Platinum tool can change My Stock List.

Nine other stock lists are the Rank Lists. The Rank Lists can be created and edited in "Edit Rank List". An example of the Edit Rank List web page is shown using the above link. The Rank Lists can be overwritten by the Create A Rank List tool. Create A Rank List defaults to Rank list 1 for writing out ranked lists. We will add stocks to Rank List 3.

Click on "Edit Rank List" in the Welcome Page. Once there, below "Choose which list to use", select Rank List 3. Type in the following with a carriage return between symbols: COMS AOL MSFT DELL RTNB. Click "save" then Welcome Page at the top.

Go to the Optionsanalysis Welcome web page, and make sure the date is 06-01-99 in the upper left. Click "All Dates" if 06-01-99 is not in your date selections. The refreshed Welcome page should have 06-01-99 appear as an selection. If not, that means the 2 year window of online dates has slided by 06-01-99. So if 06-01-99 is not there, select another available date and follow along with your choice. We will be using the "Quick Search" button and the pull down menu of options below the "Quick Search" button. The above link is an example of the Welcome Page web page.

"Quick Search" is a simple, fast way to find option trades, which have a high statistical probability of making a profit, if your market sentiments are correct. Please be aware that all option trades involve risk, and there are no 100%, risk free, option trades. The market staged a tech rally between June 1999 and November 1999. We will look for trades in June 1999 that exploit this rally and show what happens using "Quick Search".

"Quick Search" only looks for option combo trades that have limited losses. The "Create A Search" button takes you to an Optionetics Platinum web page with more advanced trading options and inputs. These are discussed in "Quick Start " and Create A Search.

There are two ways to put stocks in the Rank Lists. We discussed Edit Rank List.

The second way is to click on "Create A Rank List". In "Create A Rank List", choose a source list of stocks, choose a Rank List for output, decide how many ranked stocks to keep in the list and hit one of the Create A Rank List buttons, such as Explosive stocks.

The help procedure, "Quick Start" placed high volatility stocks, using the percentile ranker in Create A Rank List, into Rank List 1.

Choose Rank List 3, which has the stock lists we saved above. Alternatively, you could now use the Create A Rank List to find Explosive stocks, save them in Rank List 1 and choose Rank List 1 here in Quick Search.

Choose "Go Up" and input 60 days. We are bullish. We want to look for LEAP options that expire a year or more in the future and will be profitable if stocks rise.

The probability computations assume your directional bias is correct and form an overall probability using both the deterministic price path you have chosen, and the random probabilistic path from there to expiration. Option combos that are profitable if your directional bias is correct, rise to the top of the ranked Quick Search lists. Be aware, that if you chose "Big" movements and a large number of days, the probabilities will approach 1 you will be profitable, because the probabilities are computed assuming your choices actually happen in the future.

If you make the wrong assumptions about the future, then the probabilities are not valid and the suggested option trades are likely to not make a profit. But if you make the right assumptions, then the probabilities become more valid, and the option trades suggested are those that have the best potential to profit from your directional bias

Now the details for the option experts. Choices "Go Up Big" and "Go Up" causes searches only for long calls, and bullish vertical spreads. Choices "Go Down" and "Go Down Big" searches for long puts, and bearish vertical spreads. "Go Sideways" searches for Butterfly's, and "Not Go Sideways" searches for long straddle and strangles. None of these trades have unlimited risk.

The probabilities you will find in the Optionetics Platinum Risk Graph web page will not usually match the probabilities you will see in the Quick Search output. The reason is all Optionetics Platinum Risk Graph web page probabilities are computed using the assumption of random stock motion with no directional bias.

The ranking procedure is made from the choices shown above. You have ten choices. We are going to use the Expected Profit option.

"Probability of profit" ranks the search results based on propagating the stock price using statistical volatility from your predicted price projection to expiration, and computing the probability the price landed in a price range where the option was profitable.

"Odds of success" computes the amount of money you are expected to make for those price projections that are profitable, and the amount of money you lose for the price projections that have a loss. The ratio of wins to losses is the Odds. "Expected profit" is the value obtained by subtracting the expected losses from the expected wins.

To help with these concepts, consider a fair coin flip. In a coin flip, the probability is 50% that heads or tails win. So the Probability of Profit is 50%. The amount of money won and the money loss are equal, so the coin flip odds are 1:1. The Expected Profit is the wins-losses, which is 0.0.

The "Probability of profit" rankings tend to be the least desirable. The reason is the Max Risk in the top probability rankings usually exceeds the Max Profit. We would prefer to do option combo trades with more profit potential than loss potential.

The "Odds of success" rankings have lower maximum profits, but also usually have less risk. Trades with high Max Profit and low Max Risk, rise to the top of the Odds ranker.

We will be using the "Expected Profit" ranking. The "Expected Profit" ranking offers a number of advantages when you are using a directional bias to find trades. It behaves like Odds to reduce risk, but increases your Max Profit potential more than Odds. The more direction you impart ( Go Up Big ) and longer days, the higher the Expected Profit values. The interesting part about Expected Profit is you can use the value it finds as a guide to choosing your profit target exit criteria. Remember, the computations are made assuming your future expectations are correct. If you are wrong, the Search predictions are wrong.

The next figure is from Chapter 2 of the help manual and shows the analysis of a call option. The left graph shows the projection of the stock price 60 days into the future with no directional bias and the resulting probabilities. The probability of 99% means that 99% of all price projections fall between the upper and lower 99% endpoints. Chapter 2 goes into the details of how these probabilities are actually computed. The right graph shows the risk and rewards of the call option. The Probability of Profit is the integration of probability over all predicted stock prices that are profitable.

In the above figure, the Probability of Profit is 39%. 50% of the price projections are below the strike price at 70 and are not profitable. Another 11% of the price projections are not profitable between the strike price and the call option breakeven price. The remaining 39% of the price projections are in the profit zone. However, the payoff in the smaller profit zone is larger than the losses in the non profit zone. The expected winnings are $360 and the expected losses are $215. If we divide the winnings by the losses, we arrive at the Odds of the trade, $360/$215 = 1.67 to 1. If we subtract the losses from the wins, we get the Expected Profit = $145.

The next figure is also from Chapter 2 and shows the same scenario but with a deterministic stock prediction component. The strategy for the stock to "go up" for 30 days was added. The stock is then randomly varied for the 30 days thereafter.

The projected prices are almost all inside the call option profit zone. The probabilities and Expected Profit have increased considerably. The web site makes these predictions assuming your directional bias is correct.

In Quick Search, your directional bias not only affects the price projections, but also affects the trade strategies being searched. You must use a direction, like "go up", to search spread strategies. You can make the price projections all random, even when you choose a directional bias, by selecting 0 days for the time projection.

We are ready to search for trades: We assume stocks will Go Up for 60 days and we will rank using Expected Profits with max losses to be less than $1000. Click on the Quick Search button. The search result is shown using the link above. The top stocks when the example was run was 3COM Corp. (COMS) and DELL and the options recommended are long calls and vertical spreads. As we all know now, these stocks rally in Nov 1999 with the late 99 tech rally. You may not get these stocks, in your example, because we sometimes update the site data and correct past data. If not, choose the top stock and continue following along. In our case, we will choose the second long 30 call for COMS, which is a LEAP option that expires in JAN01.

Since the max Profit is unlimited, we look at the Max Risk and the Expected Profit. We want to limit our risk to at least our potential profits, if possible. The second long call for 3COMS has an expected profit of $708, which is near the max risk of $812. The max profits are unlimited. The max risk is the purchase price of the long call. We have a long time for this LEAP option to meet our exit conditions, however, 598 days, and we will analyze it using Optionetics Platinum's multi-day analysis tool.

Click on the Buy Call link for the second COMS trade. The Risk Graph result is shown using the link above. The trade becomes profitable if the stock goes up and we have a long time to wait for this to happen. If the stock does not rally, we would loose all or part of the call premium we paid. 3COM does rally, however.

The probabilities observed in the Search output will not necessarily match the probabilities found on the Risk Graph web page. The Risk Graph probabilities all assume stock movement is random from today to expiration. Also, the option combos and strikes used to find the probabilities in the risk graph table, at the bottom of the web page, do not necessarily match the trades found by the Quick Search. An equivalent set of Quick Search choices, which match the risk graph probability computations, is to choose sideways with 0 days in the Welcome Page.

Click on Save Option Trade at the bottom of the Risk Graph to save the trade.

Optionetics Platinum brings you to the "Edit Trades" web page from the Risk Graph. An example is shown above. The 3COM call option trade is listed as Number 1 and is now permanently saved. Below the trade is the Multi-Day analysis button. Change the start date to 6-01-99 and the end date to at least 12/31/99. You may have to click the all dates buttons if these dates don't show initially. Click on the multi-day analysis button.

The resulting Tabular MultiDay analysis is shown with the above link. The stock went down until Nov 1999 then had a rally. It reached the 30 price prediction in ~120 days instead of the 60 predicted. It reached a profit of $1400 on 12-14-99 and the long call can be sold at the Expected Profit projection price. Note that the profits is the sale of the call option with the original $675 costs subtracted out.

This completes the Quick Search help file. Quick Search and Quick Start visited the key web pages in the Optionsanalysis stock site and showed example capabilities from different pages. We showed how to search for trades, save trades and analyze trades. The other Chapter 4 sections discuss the rest of the Optionsanalysis web pages and all web page features.

How to find other types of trades is shown in Chapter 5 of the help manual.