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"Many features are unique, for just one example, the price-time variant options price table."
"Simplicity and customizability"
"Not likely to find a less expensive, more complete alternative for option trading support."
"Extraordinarily enough, this package also includes a backtesting capability."
"Option Wizard does not compete with packages offered at $2,000 to $7,000, or even the odd $1,000 options package, but at $99 to $199, it does stand out in its price range."
And one of our very earliest reviews:
The Option Fool Review
Topic: Percent to Double and a Software Review of
The Option Wizard Black-Scholes Excel Template
Dear Option Fool:
I want to find the percent that a stock has to rise in price for the price of the option to double. The only broker I've spoken to that had heard of it referred to it as "bull ****". Where can I get this fertilizer for options that I'm considering buying or selling? A service or software? Name names please. I appreciate your time.
The reason I'm so hot on the percent figure is that I'm a new and cautious trader and have been told by someone very successful with options that he may miss a lot of deals but he wins a lot more than he loses when choosing short term options at or below 6% to double.
Hot & Heavy for Percent to Double
Dear Double H:
It's really not that easy. The factors that go into the valuation of an option's premium vary moment to moment. Plenty of theory has been offered as the solution (have you checked out the heft of McMillan's 1000 pages lately? - he also has a new book coming in the fall, BTW) but none of it is fool proof.
You need a theoretical model to crank out the calculations yourself each day. That's much better than relying on someone else's stale data. If you have a spread sheet like EXCEL, you'd integrate a Black-Scholes engine with simple percentage formulas to get what you want. The finished product will give you the percentage needed for the stock to move in order to double the price of the option.
The theoretical model may be a tad difficult to program. If you want to really get it right, the EXCEL option spreadsheet I like for options is called OPTION WIZARD. It is available for $99.95 from its creator, John A. Sarkett. It is a 4.0 or 5.0 Excel template for either IBM or MAC that is a customizable Black-Scholes valuation engine.
The format is easy to use and understand. You enter various inputs to get the results. What I like is how one can select the price increments of the output table. The program allows you, for instance, to create a table that shows the theoretical values for a range of stock prices (I have it going up in ticks of 1/8) in the vertical direction and the effect of time decay on the horizontal axis (the Option Wizard web site has illustrations).
Such a "tear sheet" is great for traders away from their computers (reminiscent of floor trader "print-outs" that would be pulled out for a quick consult in the pit). Someone told me that this was silly these days "given the electronic ability to continually recalculate quickly" but I think that it has wonderful application still. I'm not always in front of my pc when checking on option prices and imagine that most working folk with "regular" jobs can't put their bosses on hold while they crank up their $400 option valuation models in the middle of the day.
But for $99, they can get a table of results to tuck into their pockets for pulling out while on the phone with their brokers at lunch time. I think the spread sheet is well worth the look.
Unlike the stand alone modeling programs, you must have Excel to make use of this template. Spread sheet jocks will point that out, though, as a big positive. They will love to tinker and build on it.
The Option Wizard is featured on its website. There is a question and answer session with its creator as well as a very interesting statistic on the percentage of options that expire worthless: "Economists at the Options Clearing Corporation estimate that 30% - 33% of stock and index options expire worthless, and perhaps as much as another 20% - 33% are offset at a loss. The remainder? OCC staff says some 12%-15% are exercised, and 55% are offset by closing sale (this includes the 20% to 33% offset at a loss). These figures can vary widely month to month and security to security, they say."
Visit Option Wizard.
PS. The program may be downloaded and demonstrated free.
Call Option Wizard offices at 847.446.2222 or e-mail to email@example.com or firstname.lastname@example.org.
Please mention that you were referred by Hubert Lee, The Option Fool.
Date: Wed, 27 Mar 1996
CHICAGO -- Option Wizard is a registered trademark of Sarkett & Associates, Inc. -- 111[an error occurred while processing this directive]