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Learning
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Merv's Book Online
How To Make Money With Stock Options
Read Merv's Book on our website. Please note that full access to the book is provided only to trial users and regular members.
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Planning Tools
Function Description Instructions
Covered Call Analysis
Get more profit by utilizing the "Covered Call" strategy

A typical stock has many calls at many strike prices and with many expiration dates. A typical Yahoo options page may show so many options as to be overwhelming. How do you know what return each will provide? How do you know how likely it is to be called? How do you know how easy it will be for your broker to do the trade? How do you protect yourself from losing the dividend if the stock is called on the exDividend date?

That's what this program is for!

It looks at every unhedged long stock in your DYY portfolio and calculates and displays the data you need to know for each of the calls on those stocks.

==> View documentation

Plot Chain Graph & Option Combinations
  • Instantly perceive options characteristics
  • Visualize and experiment with option combinations

This tool consists of the two: Plot Chain Graph and Option Combinations.

Plot Chain Graph

The graphs enable you to instantly perceive which options are over- or under-priced, how much of a premium is intrinsic and how much time-related, the relation between the premiums of puts and calls, and between options of various maturities. The tables show the annualized return from the decay of the time premium, from the sale of each option.

Option Combinations

Now that you have data tables with several option positions on the same stock* with the same expiration (generated by the Plot Chain Graph), you can use Option Combinations tool to generate a graph of the profit at expiration for various closing stock prices. A stock position can be included, and the tool can also account for commission costs. The tool will allow you to visualize and experiment with option combinations** such as hedges, and see the range of possible profits and losses.

* We use the word "stock" here to refer to any underlying security on which options can be written, such as stocks, exchange-traded funds (ETFs), indices, commodities, etc.
** We use the word "combination" here to refer to any combination of long and/or short positions in a stock and/or its options with the same expiration date.

==> Help
==>
Examples
Manage Hedges

This program facilitates management of complex hedges. It shows all the information about the individual options and the overall position. It shows how far the stock is from the stop loss points, and the current liquidation value of the position.

It also plots the graph of profit at expiration versus price at expiration. It superimposes a green line showing today's position and the upper and lower stop loss points in red.

Fight Dividend Skimmers
The tool helps to make sure that the strike price is far enough out-of-the-money

Dividends are paid every 3 months to whoever owns the stock on one particular date, the "Ex-Dividend Date". On occasion the call will be executed just before the ex-div date, so the call-writer will lose the dividend for that entire quarter. So, for those options which will be open on an ex-div date, the option writer has to be sure that the strike price is far enough out-of-the-money that a skimmer couldn't make money by calling the stock.

This program identifies the option expiration months for which one should select a strike price such that he would make a profit greater than the dividend if the stock is called.

Select Bull Put Spread
When you buy or short a security, there's about a 50% chance of losing you money. This program helps you profit far more than 50% of the time by choosing OTM Bull Credit Put Spread so that you could sell an out-of-the-money (OTM) put.

Trading Tools
Function Description Instructions
Manage Positions The main Trading Tools spreadsheet with positions from across all available portfolios listed, provides a lot of flexibility in presentation, and what data is displayed. A portfolio manager, or a person investing for several family members, can combine all the positions in this one spreadsheet. This is particularly helpful when a manager is making the same trades in a number of accounts. Some of the unique features include:
  • Stock and option positions are bunched together so that the full position can be analyzed. Typically in brokerage statements they are separated.
  • Color coding allows to see which positions expire, which generated some profit and have to be rewritten, which require some other action.
==> Quick Introduction
==> Help page
Manage Archived Positions Area where you can manage archived positions (e.g. closed options) and view totals for tax purposes ==> Help page
Portfolios Create/Rename/Edit/Delete your portfolios here ==> Help page
Reports Generate various reports (based on data from your portfolios) ==> Help page
Help Trading Tools help page.

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