Position Simulators

T

trader56

I've been playing with the free Position Simulator for stocks from the OIC.

Unfortunately, there seems to be no capacity on this program for simulating and graphing positions in the indices like QQQQ.

After searching the internet a bit under "free option position simulator," I've not found anything similar that will allow for indicies simulation.

Does anyone know where a simulator for the indicies might be found?

Thanks for any help!
 
Try optiongear.com.au - but it costs.
You could also sign up with optionsxpress.com and open an account (no funds required) for free and use their software.
daddy's boy
 
Quote from trader56:

I've been playing with the free Position Simulator for stocks from the OIC.

Unfortunately, there seems to be no capacity on this program for simulating and graphing positions in the indices like QQQQ.

After searching the internet a bit under "free option position simulator," I've not found anything similar that will allow for indicies simulation.

Does anyone know where a simulator for the indicies might be found?

Thanks for any help!
More...
Why do you think a different simulator is needed for the QQQQ or indicies in-general? I would think any american style option including the QQQQ could be handled by the same simulator (okay, maybe euro style contracts need a different simulator).

Don
 
Quote from trader56:

Does anyone know where a simulator for the indicies might be found?

Thanks for any help!
More...

There should be no special requirements to deal with indexes or indeed ETFs. Search on ET, especially this forum. Even just look back a few pages, it has been covered. Try using different search terms. Be creative.

Good luck.

MoMoney.
 
Thanks, guys!

I didn't think there'd be a difference either, but in an example I saw:
QQQQ was trading at 37.30
The 36 call is trading 1.70
THe 39 put is trading 1.90

The example said if you bought 10 of the strangles, the maximum you' d lose is only $600, NOT the $3600 you paid.

When I do this, if volatility starts at, say, 35, then drops quickly, my simulation shows you can lose in excess of $5000!

Now, the OIC simulator only lets you put in strikes in $5 increments, so I used 35 for the call, and 40 for the put, and bought 10 of each.

I'm just not sure why my results are showing up so differently from the problem's author.

Any ideas???
 
Quote from trader56:

Thanks, guys!

I didn't think there'd be a difference either, but in an example I saw:
QQQQ was trading at 37.30
The 36 call is trading 1.70
THe 39 put is trading 1.90

The example said if you bought 10 of the strangles, the maximum you' d lose is only $600, NOT the $3600 you paid.

When I do this, if volatility starts at, say, 35, then drops quickly, my simulation shows you can lose in excess of $5000!

Now, the OIC simulator only lets you put in strikes in $5 increments, so I used 35 for the call, and 40 for the put, and bought 10 of each.

I'm just not sure why my results are showing up so differently from the problem's author.

Any ideas???
More...
The OIC simulator is probably an accurate tool so my guess is that you doing something wrong. Are you sure you are using the correct IV figures?

Don
 
Quote from trader56:

Thanks, guys!

I didn't think there'd be a difference either, but in an example I saw:
QQQQ was trading at 37.30
The 36 call is trading 1.70
THe 39 put is trading 1.90

The example said if you bought 10 of the strangles, the maximum you' d lose is only $600, NOT the $3600 you paid.

Any ideas???
More...

trader56,

Actually read the details of your post this time around LOL.

QQQQ was trading at 37.30
The 36 call is trading 1.70
THe 39 put is trading 1.90

This is a guts strangle. You'll notice that both the PUT and the CALL are ITM.

The 36 CALL has $1.30 intrinsic value and $0.40 extrinsic.
The 39 PUT has $1.70 intrinsic value and $0.20 extrinsic.

Therefore max loss is the $0.60 extrinsic value per spread = $600 for 10 lots.

It is synthetically equivalent to (has the same risk profile) the following strangle:
36 OTM PUT (around $0.40)
39 OTM CALL (around $0.20)

The debit for this strangle would naturally be around $0.60 per spread if p/c parity holds ignoring American exercise issues.

Hope that helps.

MoMoney.
 
Thank you, Mo!

A great explaination, and chance to learn!

Thank you, too, to everyone else who was kind enough to help with a response!
 
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