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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1375  
Subject: Re: software / calculator to analyze option yiel Date: 12/10/2012 5:32 PM
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You wrote, Bridge Data Systems and Bloomberg Terminals both have software to analyze options in real time. I believe that a Bloomberg terminal costs about $50K - $65K per month.

Very helpful to an Options Beginner, I'm sure. Obviously your point was to discourage options beginners from playing this game - not necessarily bad advice, BTW.

Options beginners might be better served to check out the tools at their broker. Schwab, E*Trade and TD Ameritrade all offer various analysis tools for options. And the formula for pricing an option is known as the Black-Scholes algorithm. If your broker doesn't offer a Black-Scholes calculator somewhere on their site, there are free ones available on various websites...

Of course Black-Scholes only tells you what the option should be trading at given the past performance of the stock. It does not tell you how future news and price action might affect the performance of the option. Also anticipated news can move the current option price away from the "BS" number as market opinion shifts. The BS number is only an "ideal" number based on historical price action and a current discount rate.

Lots of brokers now offer option analytic tools for free to account holders. Obviously the reason for offering such a service is to give their customers confidence to trade ... so they can reap more in commissions. Do they make you a better trader? Answering that is beyond me.

- Joel
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