In Create An Option Trade, select the button "My Matrix", next to the trade for which you want tabular output. Click on the above link for an example page.
What you will then see is a page that will allow you to change many different parameters. Here we take each parameter one at a time, and explain it's significance.
This is the place where you can change the name of the trade.
Backspace out the current name and type in your own name.
There are two possibilities here. "Vary Days Remaining" means to make a table with rows showing stock prices and columns showing days remaining in the shortest dated option in the combo. The first column is always the analysis as of the date of the quotes.
"Vary Implied Volatility" creates a column of different
implied volatilities and shows combo profit/loss as the IV is varied.
Variable Rfactr changes meaning depending on whether you selected "Vary Days Remaining " or "Vary Implied Volatility". Let's say you selected "Vary Implied Volatility". Then Rfactr is how much to increase or decrease the nominal implied volatility, before creating the table. If you select "Vary Days Remaining ", then Rfactr is how much to increase or decrease the nominal date.
Set Rfactr equal to zero if you are unsure what to use.
Zero means to use nominal values for both cases.
Email each day at 8PM CDT
Check this box if you want this trade analyzed at the end of each business day, and emailed to you.
The email address you specify in My Personal Data is used to send you email.
Any or all of the checkboxes above can be check, depending on which
variable to want displayed in your trade table.
Note Profit is checked as default.
Profit is how much money the trade makes. Price is the cost of the trade.
If you choose price and the prices are negative, this means
that the trade is a credit. If you examined the price of say a long call, you would find the price table
to be all positive numbers. If it had been a short call, they would have been all negative numbers.
DELTA in the table, is showing deltas in actual stock, rather than the usual 100
times delta. We thought this was easier to read. So a delta of -0.9 means your combo is equivalent
to 9/10's of a short 100 shares of stock.
The Theta and Vega tables are in dollars. We also felt this would be easier to read as well.
When Theta and Vega are shown in dollars, a $ sign is placed
in front of the number.
The above inputs are how you can specify the implied volatility ranges, when Vary Implied Volatility
has been selected. 2 for the increment
means that the table will have 11 columns varying 2 percentage points per column.
100 is the high and -100 is the low in the IV variations allowed.
The inputs above are how you can specify the ranges for
variations in the underlying stock. The high, low and inc should be fairly self-explanatory.
If the high is 11 and the low is 1
and you pick an inc of 2, the data will increment from
1 to 11 as 1 3 5 7 9 11.
You configure the inc boxes depending on how much data
you want to see. Try increments of 5 for stock
5 for days and 2 for IV and adjust depending on your desires.
This is simply the increment on Days remaining. The smallest increment is 1, which means to create
a column for each day until expiration.
After making ANY changes whatsoever in the above form, you must click on:
Save Entered Data, which updates a temporary file holding all of your inputs.
To exit this input form AND save your entries permanently, you must click on:
Return to Edit My Option Trade which will write your temporary file to your permanent file and
show the Edit My Option Trade screen again. If you simply hit "Back" on your browser, none of the
changes will take effect, (which may be desired.)
We are done with the "My Matrix" parameters.
Click on the above button to go back to the example "Edit My Option Trade" web page.
The Backtest analysis tool is activated in the lower part of Edit My Option Trade
screen and appears as follows:
Backtest My Trades
The Backtest Analyzer fields are explained in the following.
Single Day Analysis
The user has the option to perform a single day analysis or a multiple day analysis. If the button "Single Day Analysis!" is clicked, then all the users trades will be analyzed at the date selected. This is fairly straightforward. One note is probably worth mentioning. The Backtest analyzer does not know or care what date the trade was initiated. It does not keep track of this information! All it keeps track of is the PRICE you paid or received for each trade.
As an example, let's say you entered an AOL vertical spread on 09-29-98; at a debit of $1000. If you choose to do an analysis on a date earlier that 09-29-98, say 09-01-98, this is not a problem for the analysis tool (as long as there is option and stock data at that earlier date.) More than likely the trade will either be showing a huge profit or a huge loss, simply because the program takes the value of the combo at the date you select (09-01-98) and compares it to the value you received or paid ($1000). The analysis tool doesn't care that you initiated the trade on 09-29-98, it just cares what price you got for your trade.
Multiple Day Analysis
Multiple Day Analysis is one of the most exciting features of the web page. What this button allows you to do is examine how a given trade changed day by day, between the two dates you select. You can go back into the past, create combos by looking at the rankings (in the past), and then watch how the combos you created varied after being initiated. This is a very powerful trade Backtesting capability. You can get "paper experience" very easily for any given type of combo by using the Backtest analyzer.
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