OpenBB/assets/js/5e579ff4.be0481cf.js

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There are two columns of inputs: the price for the underlying at the close on expiration and the statistical probability of the outcome.",source:"@site/content/terminal/guides/intros/stocks/options/pricing.md",sourceDirName:"guides/intros/stocks/options",slug:"/guides/intros/stocks/options/pricing",permalink:"/terminal/guides/intros/stocks/options/pricing",draft:!1,editUrl:"https://github.com/OpenBB-finance/OpenBBTerminal/edit/main/website/content/terminal/guides/intros/stocks/options/pricing.md",tags:[],version:"current",frontMatter:{title:"Options Pricing",keywords:["Options","stocks","derivatives","puts","calls","oi","vol","greeks","hedge","gamme","delta","theta","rho","vanna","vomma","phi","charm","iv","volatility","implied","realized","price","last","bid","ask","expiry","expiration","chains","chain","put","call"],excerpt:"This guide introduces the user to the Options Pricing submenu, within the Options menu."},sidebar:"tutorialSidebar",previous:{title:"Hedge",permalink:"/terminal/guides/intros/stocks/options/hedge"},next:{title:"Options Screener",permalink:"/terminal/guides/intros/stocks/options/screener"}},c={},p=[{value:"How to use",id:"how-to-use",level:3}],l={toc:p};function u(e){let{components:t,...n}=e;return(0,r.kt)("wrapper",(0,i.Z)({},l,n,{components:t,mdxType:"MDXLayout"}),(0,r.kt)("p",null,"This set of features is for composing hypothetical outcomes through user-defined inputs. There are two columns of inputs: the price for the underlying at the close on expiration and the statistical probability of the outcome."),(0,r.kt)("p",null,"The Pricing submenu is accessible after selecting an",(0,r.kt)("a",{href:"/terminal/reference/stocks/options/exp",target:"_blank",rel:"noreferrer noopener"},"expiration")," date for the options chain. Type, ",(0,r.kt)("inlineCode",{parentName:"p"},"pricing"),", and press enter for access."),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172729310-dd341d26-c55e-4e29-a190-3e1eea1a6950.png",alt:"The Options Pricing Submenu"})),(0,r.kt)("h3",{id:"how-to-use"},"How to use"),(0,r.kt)("p",null,"Use the ",(0,r.kt)("inlineCode",{parentName:"p"},"add")," command to build the list, and use the ",(0,r.kt)("inlineCode",{parentName:"p"},"rmv")," command to take away any entries."),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172732199-cb6f0cc9-0713-4bab-8e0c-5cd3e458f74a.png",alt:"Add and remove"})),(0,r.kt)("p",null,(0,r.kt)("inlineCode",{parentName:"p"},"show")," will print a table of the inputs. Multiple price points can be added, assuming that probability always sums at 100%."),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172732726-09fcdcda-cb2a-46fd-ba0b-23c3b27c6067.png",alt:"Calculated outputs for calls"})),(0,r.kt)("h2",null,"Examples"),(0,r.kt)("p",null,"Adding the optional argument, ",(0,r.kt)("inlineCode",{parentName:"p"},"-p"),", will calculate the puts in the chain."),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172733009-5a58a7f2-577d-4599-956e-29df2cdb3f91.png",alt:"Calculating for puts"})),(0,r.kt)("p",null,"Removing the risk-free rate variable makes a substantial difference to the calculated value of an option."),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172733137-8588b7a5-6384-4ba4-9d3c-943a10af280d.png",alt:"Puts calculations with RFR = 0"})),(0,r.kt)("p",null,"RFR as 0 for call options"),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172734277-223f855a-8ad1-4f45-ad5b-0a1d92d94290.png",alt:"RFR as 0 for call options"})))}u.isMDXComponent=!0}}]);