Introduction

The Profit & Loss Calculator allows you to input any option strategy known to man and then view the net profit or loss in a table format or in a dynamic graph. Sliding the pointer over the line graph lets you see how your profits or losses change as the underlying price does; the corresponding tables show you your risk parameters and analytics for the entire position.

Enter as many legs as you wish using the integrated options chains; your line graph will calculate in the main window automatically. A table summary of profits or losses around your breakeven point will appear to the left of the graph.
Horizontal sliders below the line graph make it easy to see how changes in volatility or time to expiration affect your profitability and price targets.

Getting Started

Enter an underlying stock, index or ETF symbol in the "Add from Chains" field. The Options Chains will pop up in a separate window. If you don't see the option chain window make sure your pop-up blocker is set to allow pop-up windows from this page.

To add legs to the P&L Calculator, choose as many options legs as you like from the Options Chains in one of two ways:

• Click the checkbox once to indicate you want to buy the option, click twice if you want to sell, and click a third time if you want to clear the field.
• Or click on the bid text link to indicate a sell, or the ask text link to enter a buy.

When you've selected all the legs you want to chart, click the "Add to Calculator" button.

Your line graph will calculate in the main window automatically. A table summary of profits or losses around your breakeven point will appear to the left of the graph.
In a glance, the P&L Calculator shows the potential profit or loss of your entire trade, including all legs, as the underlying security price moves up or down. The dark-blue horizontal line in the  middle of the graph shows your break-even point, i.e. where your profit would equal zero.
Slide the pointer over the line graph and cross-hairs will appear. Use this feature to pinpoint your exact profits at a given price-level for the underlying.

To stop displaying the cross-hairs, click the icon in the lower right corner of the line graph.

To refresh the quote data, click the button in the upper left corner of the line graph.

To zoom in or zoom out on the line graph, right-click anywhere in the graph and select from the menu. You can also drag the graph up or down, left or right, to see any part of the full picture.

Fine-tuning Profitability Assumptions

The P&L Calculator lets you streamline even complex, multi-leg options strategies, so you can pay attention to a single figure: the changing movement of the underlying. At the same time, the P&L Calculator gives you the control to fine-tune assumptions that may affect your profitability forecast.

To adjust assumptions about dividends, interest rates or contract size, right-click anywhere in the line graph area and choose "Settings" from the menu. A tabbed window will appear.

To adjust for changing volatility, use the horizontal slider below the line graph, to the far left. You can either enter a figure in the text-entry field, or drag on the slider with your mouse.
To measure changes in volatility in relative terms, choose "Relative" from the dropdown menu on the Volatility slider. In this example, if current implied volatility is 16.25%, a 10% relative move would translate to 17.875% (16.25% x 0.10 is added to the original implied volatility, because the relative move here is positive.)
To measure changes in volatility in absolute terms, choose "Absolute" from the dropdown menu. After a 10% absolute change, for example, volatility would equal 26.25% (10+16.25).
To see how time-to-expiration affects your potential profitability, the horizontal slider below the line graph, to the far right. You can change this value in one of three ways:

• Type a figure in the text-entry field
• Drag the horizontal slider with your mouse, or
• Click on the calendar icon and choose a date. (Expiration dates are highlighted.)

The Days to Expire slider populates automatically with today's date.

Integrated Strategy Trading and Analytics

Below your line graph you'll see a table of all the option legs you've entered. This section summarizes key Greek values and bid / ask for the total position, as well as for the individual legs.

"Chart Price" shows whatever price for the underlying you've displayed in the line graph. As you adjust this price up or down, all the analytics adjust dynamically, too. In fact, any values you change in this table - contract quantity, for instance - will dynamically update the line graph.

To sort columns, click on the pale-blue arrows above each column heading.
To remove a leg, make sure its checkbox is selected, then choose "Remove" from the pulldown menu. You can also Remove All with the text link under the checkboxes (far left).

If you already own one leg of the strategy, you can "lock" the price by clicking the blue lock icon. That way you can refresh the chart data, see dynamically updated profitability stats and analytics, while your "locked" leg stays at the same price.To see charts, option chains or trade a SINGLE leg, use the red Power Menu at the far right.To trade multiple legs as a single strategy, choose from the strategy options listed in the pulldown menu. Trading strategies this way may help you minimize risk in legging into a position.

To flip the strategy, i.e. turn a former buy into a sell and vice-versa, choose "Flip" from the pulldown menu at the far left.

Technical Troubleshooting

P&L Calculator runs on JavaTM technology. If you do not have Java Virtual Machine (version 1.3 or higher) on your computer you can download and install it here:

http://www.java.com/en/download/

The process is fully automated and takes just a few minutes.

 

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