Options trading model excel

Current stock price: The stock price of the underlier today. Break even price: The price the underlier has to reach for the option play to break even. Put Cash Reserve: The amount of money needed in the account to sell the option. Put Margin Reserve: The amount of money needed in the account to open a naked put option sold in an account using margin. Fees: All transaction costs for each trade including commissions. Close Date: The day you either exited your option play or it expired. Dark green for profit and red for a loss.

Margin Annualized ROR: Calculates the annualized rate of return based on the smaller margin cash reserve. Status: Whether a current option play is open, closed, or exercised. Account: The account the option trade is executed in if you have multiple accounts like one for options, one for stocks, IRA, or Roth IRA and trade option plays in each.

This is a great options trading spreadsheet tracker for option traders to manage and have good visibility for each of their trades in real time. Options trading can be complicated and this helps make the option plays more visible. I have created the Options eCourse for a shortcut to learning how to trade options. Home options Stock Option Spreadsheet Templates.

An option contract gives the buyer the right but not the obligation to buy or sell an underlying asset at a specified strike price on a specified date. Premium — is the amount paid to book a call or put option contract. This amount is decided by the seller. Expiry Date — is the date at which the option contract expires. Normally every option contract expires on the last Thursday of every month.

Based on expiry, the option contract is categorized into 3 groups, Running option contract nearest expiry , Middle option contract mid expiry , Far option contract farther expiry.

For example, if for a contract the nearest expiry is last Thursday of March, then mid expiry will be last Thursday of April, and far expiry will be last Thursday of May. Once the contract expires, a new contract for the next month is generated. As a buyer or seller, you can hold the contract till the expiry.

Call option contract — is a contract that gives the buyer the right but not the obligation to buy an asset. A premium amount must be paid to the seller for booking the asset. For example, say the strike price for a contract is Rs. Now, after one month if the price of the asset increases to Rs. Suppose if the price decreases to Rs. Here the buyer only stands to lose the premium amount. This is known as a Call option contract Right to buy.

Put option contract — is a contract that gives the buyer the right but not the obligation to sell an asset. Now, after one month if the price of the asset decreases to Rs. Suppose if the price increases to Rs. This is known as Put option contract Right to sell. If the strike price is less than the market price then it is ITM, if the strike price is equal to the market price then it is ATM, and if the strike price is greater than the market price then it is OTM.

For example, one contract will comprise shares. So, you always buy or sell in terms of the number of contracts and not the number of shares that each contract has. It provides detailed quotes and price information. It shows all listed puts, calls, their expiration, strike prices, and volume for a single underlying asset within a given maturity period. The option chain is categorized by expiration date and segmented by calls and puts. Here is a screenshot of a portion of the option chain for Nifty taken from the NSE website.

Data in the option chain chart is grouped into 4 quadrants. OI Open Interest — is the number of contracts that are traded but not exercised.

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It indicates the interest of traders for an option at the given strike price. It indicates the number of contracts that are closed or exercised. VOLUME — is the total number of contracts that are traded for a specific strike price in a given period. It is calculated on daily basis.

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IV Implied Volatility — is the indication of how the market reacts to the price movement of an underlying asset. It is indicated as a positive or negative value. Positive change means a rise in price shown in green. A negative change means a decrease in price shown in red.

It indicates the current demand for the order. If this price is higher than the LTP then it indicates higher demand for the option and vice versa.

Now that you have an understanding of the option chain, I will show in this section how to import option chain data in Excel. Once the data is loaded you will learn various strategies to analyze this data and predict trends. There are two options to get the data. The link to download the CSV file is given at the top of the option chain chart.

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Another option is to link to live data on the NSE website, to analyze options data in real-time. I will be explaining the process for this in the next part of this article along with different types of technical analysis. For the options chain data analysis, I will use only some key columns and delete the remaining. The criteria for column selection will be explained when I discuss the strategy. Once the unwanted columns are deleted fill the empty cells with zero so that the computations are not affected by hyphens.

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These hyphens in the chart indicate no activity happening for the given period for the respective strike price. The preprocessed data is now ready for analysis. Before diving into analyzing the data, you need to understand the strategy for this analysis. There are at least different strategies based on which traders analyze the data.