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SMB CAPITAL OPTIONS TRAINING PROGRAM

SMB CAPITAL OPTIONS TRAINING PROGRAM. SESSION THREE. OPTIONS ANALYSIS SOFTWARE TRAINING. OPTIONS ANALYSIS SOFTWARE.

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SMB CAPITAL OPTIONS TRAINING PROGRAM

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  1. SMB CAPITAL OPTIONS TRAINING PROGRAM

  2. SESSION THREE OPTIONS ANALYSIS SOFTWARE TRAINING

  3. OPTIONS ANALYSIS SOFTWARE • Unlike other investment vehicles, the prices of options are affected by multiple factors simultaneously: price of underlying stock, ETF or index, volatility, time to expiration and other factors.

  4. For this combination of short and long options, what is the income potential?

  5. Not so easy is it? • It is complex to calculate the present and future values of each of these factors without the help of mathematical models and graphic displays of the present and future potentials for each of the options the factors underlying. • Graphic displays are very important to be able to quickly assimilate how each of the options pricing variables interact with each other over time and at different price and volatility levels.

  6. Income potential graphically displayed

  7. OPTIONVUE TUTORIAL • Options analysis software has been developed to project the value of each option in a position, and the combination of ALL options in a position, based on mathemetical models. All online brokers have some form of analysis software embedded in the trade execution platforms, but to date none have developed adequate backtesting modules that are critical to developing solid strategies. • Cut and paste this link into a web-browser in order to view the Optionvue Tutorial. Approximately two hours of tutorial material. • http://www.optionvue.com/OV6tutorial.aspx

  8. Homework • Install Optionvue Software onto your computer. • Use any of the following candidates for these exercises: $SPX, $RUT, $NDX, $MID,GOOG, AAPL, CME, DIA, SPY,OIH,MDY, IBM. • Go into back trader selecting any month over the last year and select one of the above vehicles to initiate a credit spread 35 days prior to expiration. Observe it each day at 4pm EST until expiration. Mark down final profit or loss. Try to explain in your words WHY it made a profit or a loss. • Do the exact same exercise for a debit spread, a double diagonal, an iron condor and a butterfly a calendar spread.

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