Calculating Profit/Loss on a given Date

T

trendtraderOL

Hey guys. Which online or stand alone soft can you propose to calculate Profit/Loss on any given date before expiration if purchase price and purchase date for given option are known and they are in the past? Optionprofitcalculator.com is very helpful but it can only model if you buy option today. To illustrate what I mean. For example, I hold MSFT call 32 with expiration January 19, 2013. I bought it on April 25 2012 for 200. How can I calculate/model P/L of my position if on November 1, 2012 stock price would be 25 and I want to sell it? Thanks.
 
Quote from trendtraderOL:

Hey guys. Which online or stand alone soft can you propose to calculate Profit/Loss on any given date before expiration if purchase price and purchase date for given option are known and they are in the past? Optionprofitcalculator.com is very helpful but it can only model if you buy option today. To illustrate what I mean. For example, I hold MSFT call 32 with expiration January 19, 2013. I bought it on April 25 2012 for 200. How can I calculate/model P/L of my position if on November 1, 2012 stock price would be 25 and I want to sell it? Thanks.
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OK, if you're serious, this is quite simple. Just like a stock, an option position can be closed by either buying or selling the option. If you bought it for $200 - a $320 strike price call? Stock is trading at $564, so a 320 call has an intrinsic value of $264, which I'm sure is the bid on the thing. Therefore a $64 profit approximately.

Hope this helps,

Don
 
trendtrader---

First a question, then two suggestions:
1) by 200, did you really mean $2.00 per option? I'm assuming this is the case because MSFT= Microsoft, and the prices fit for Microsoft.

2) If you want to "know" the price in November if the stock is $25, then set your assumption for days to expiry to the same amount of days or about the same amount of days as there is from November 1 until Jan expiry. This will treat your purchase as if it were bought on November 1 to expire in January and give you an approximate value for that length of time. Please realize that this is only an estimated value and the real value in November first might be somewhat different (your IV might be higher or lower than expected)

3) use think or swim-- their modeller can give you values at intermediate times.
 
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