What is the use of Option Calculator?

How a Option Calculator is useful in option trading?

  • Is there any importance for option calculator while trading in option?
1 Like

we can know the values of option greeks

  • It lets you estimate the theoretical fair price of options, you can compare with current market price and see whether the option is overpriced or underpriced.
  • It lets you estimate the time erosion and see how much loss you would incur if you hold the option with you (without any change in the underlying)
  • It enables you to arrive at a stop loss figure
  • It generally outlines the payout graph and let you understand when you will reach the breakeven.
  • It provides the option greeks enabling you see how much the option price will change for every unit change in the underlying. (delta)
  • Sometimes you get to know the put call parity also, the difference in call and put prices for the same strike price.