State-of-the-art options analytics

The options tool of choice among traders and investors around the world. Our mission: help you become an Option Wizard.

This brief web manual is as close to intuitive as options software has yet come.
Please print (about 14 pages), read (about 10 minutes), mark up. Then email questions, comments.

NEW PROCESS for FREE DELAY DATA

Our Internet source for free options data has changed its functionality. As a result, step one will now be to download data from the site, one chain at a time, then import into Option Wizard® Scan.

STEP ONE
Access your delay data source, CBOE
Dialog box: "Do you want to save this file?" Yes, save to desktop or desktop folder or place of your choosing for easy access from OWS.

Unable to download the file? May be because you:

Have Norton Internet Security Professional enabled (disable it)

Not using Internet Explorer 6.x or higher or Netscape Navigator 7.x or higher

Not having the "File Download" setting option enabled within the Security Settings for the Internet within your browser

Having the security setting within your browser on "High"

Having a firewall (personal or corporate) engaged

Having "Block" all cookies enabled and/or not allowing session cookies

Having your Virus Software "Download" settings scanning and removing or blocking downloads

Having your Java Scripting settings disabled

Using a Windows 98 or earlier Operating System

STEP TWO
Open Option Wizard® Scan, import downloaded data. In SCAN, TRADEFINDER, ANALYZER, enter correct ticker, program will prompt you for your just downloaded data file to read.

We also offer real time functionality via eSignal; this version can download entire lists of ticker symbols; check their data prices.

FUNCTIONS

SCAN

Select Scan:Scans:Volatility Scan:symbol or list (for new scan, always start with Scan button on toolbar to open new window)

Scan retrieves your options string fast. All options, including LEAPS, for any stock. Enter ticker, hit button.

NOTE: When using delay data, and calling for index options, preface ticker with ^ mark (shift-6 on your keyboard, e.g. ^SPX, ^OEX, etc.

Quotes from all regional exchanges to show your best price:
Analyzes actual options (not stocks as some programs) -- and generates theoreticals

Calculates:

3 implied volatilities for each option: bid, ask, average bid-ask
Historical volatilities for the underlying
In-the-money probabilities, for each option
Greeks: delta, gamma, theta, vega, rho
Volume, open interest
Sorts, ranks all above categories with simple double click to find

Least expensive options

Most expensive options

Highest delta

Lowest delta

Highest, lowest in-the-money probabilities

Highest, lowest volume

Highest, lowest open interest

Special scans, as well, e.g. Calendar spread debit recoup ratio shows how much credit can be gained by buying back the near option, selling one further out, and custom scans you design yourself.

Ticker list sources:

Option Wizard® Scan starts you with ticker lists, but tickers change each day. Use these sources (which themselves change from time to time) to stay up to date. Delay data is downloaded ticker by ticker from the CBOE site; real time data from eSignal can be accessed for an entire list of tickers.

DOW JONES 30
http://www.djindexes.com/mdsidx/index.cfm?event=showComponentWeights&rptsymbol=DJI&sitemapid=1

NASDAQ 100
http://dynamic.nasdaq.com/dynamic/nasdaq100_activity.stm
http://finance.yahoo.com/q/cp?s=^ndx

SP500
SP constantly changes their web pages.
Presently at http://www2.standardandpoors.com/spf/xls/index/sp500.xls

Start with:
http://www.standardandpoors.com
Drill down:
Index methodology
Browse By Index
S&P 500
Constituent List
Download table
Save as .txt or .xls

INDUSTRY GROUPS
http://biz.yahoo.com/research/indgrp

SCREEN STOCKS
http://screen.yahoo.com/stocks.html

Note: Manually change any stock that is listed as XYZ.B to XYZb to conform to Yahoo ticker format.

Example: A volatility scan for Microsoft provides all the basics in one screen: symbols, bids, asks, volatilities, volume.

IV/HV columns (implied volatility divided by historical volatility) shows the relative "cheapness" or "expensiveness" of any option. Which is highest, lowest for any stock, or any list of stock. Simply click on the column heading to sort. All columns are sortable.

Option Wizard® Scan also shows open interest, theoretical value, in-the-money probability, Greeks: delta, gamma, rho, theta, vega.

A Swiss fund manager recently exhaustively compared the Greeks in Option Wizard® Scan to a set of other options software packages. He told us ours was the most accurate. The reason: we employ advanced numerical methods to provide greatest possible accuracy. But the point of Option Wizard® Scan is never to show off our engineering -- it is always to make money for you. Let's look at a real world example next: calendar spreads.

Let's get more specific and try to make money. Which calendar spreads offer the quickest payback -- best risk:reward? Option Wizard® Scan sorts, ranks and displays the answers for you.

Ticker "JNJ" (Johnson and Johnson, a Dow 30 stock) (line 6 below) has some intriguing possibilities: 1) Buy Jan. 2006 60 put for 9.10, sell the May 2004 60 put for 6.10 -- a net debit of 3.00. In doing so, you are buying 23.83% volatility in the LEAP put, and selling 33.88% volatility in the May (near) put. The near IV/far IV is a favorable 142.22% -- you are buying the cheaper, selling the more expensive options. The difference is 10.06%.

But what is the roll possibility. Option Wizard® Scan provides the answer in the next screen, "calendar spread month roll credit." The May 2004 put can be bought and the June 2004 put can be sold for a .25 credit. If the options strategist could replicate that 21 times from June 2004 to Jan 2006, that would be a gross credit of 21 x .25 or 5.25. Net debit to enter the calendar spread is 3.00. So we have a potential profit of 2.25, 75% in total, or 45% annualized.

There is risk, however. If JNJ moves significantly above or below 60, the opportunity to roll (buy in the near month and sell the next month out) will be severely diminished. However, the risk is quantified (3.00).

Menu choices for Volatility Scan include:

Export to Microsoft Excel
Sort by Stock Ticker, Expiration, Call/Put, Strike

TRADEFINDER

takes your price-time forecast, analyzes 18 options strategies, finds and ranks your most profitable trades among:

BULLISH
Long call
Short put
Bull spread
Synthetic long

BEARISH
Short call
Long put
Bear spread
Synthetic short

MIXED
Call ratio backspread
Put ratio backspread
Long butterfly
Short butterfly
Long straddle
Short straddle
Long strangle
Short strangle
Long iron condor
Short iron condor

Projected Date = End date of your forecast period, i.e. the day by which your price objectives will be met.

"Expected" refers to how the particular strategy would perform against your forecast, i.e. your low forecast and your high forecast.

ROI high and ROI low, (return on investment), is how the strategy would perform against your forecasts and required capital.

In the example below, we revisit JNJ to see if we can generate a better idea than our earlier calendar spread. Our forecast calls for JNJ to be rangebound 18 months out, plus or minus 10%.

Menu choices for TradeFinder include:

Export to Microsoft Excel

To view this trade (short strangle) in Analyzer (also available by selecting the line, right click, "launch")

ANALYZER

creates risk curve and profit-loss-decay table for any options position (not just spreads).

Risk curve graphics are customizable for color, 3-D, etc.
Number of legs and table dimensions are client-defined, infinitely customizable.

Here’s how it works: After you input ticker, Option Wizard® Scan retrieves all options (you’ll see button in bottom right is red -- that means it is retrieving and storing options for your ticker). When it is done, the rectangle turns green, the first box in the grid turns yellow, instruction line says: Enter data in yellow cell, then hit enter. Click in call/put, select one. Click in action, click buy or sell, click in expiration, you’ll see a dropdown box offering you the expirations that exist for your ticker. Enter number of contracts. Option Wizard® Scan fills in actual market price, dollar value and the greeks.

Save Risk Curve as jpg for your web page or report. "Save Strategy," retrieve it later from "My Strategies" for price updates, further review.

Menu choices for Analyzer include:

Export to Microsoft Excel
Save Spread
View Saved Spreads
Ports your trade to OptionsXpress.com

QUICK TIPS

To zoom in on any chart area, rectangle it left to right. To zoom out, draw rectange right to left.
To navigate from screen to screen, control + tab
Choose Options: Hide Icon Bar to expand screen, show more data
Export to Excel, print price sheets
Save graphs as jpegs, open in IE
In Analyzer, Option Price Decay Table, price quoted is that to offset trade, i.e. if you are long, we quote the bid side, if you are short, we quote the ask side, to give the truest picture of your position.

VARIANCE (an Option Wizard® Scan exclusive)

How much does your stock move? What expectation might you have of success for various strategies? Option Wizard® Scan Variance function provides answers from your customizable parameters.

Here is a rundown on each screen. (Parameters user-defined in preferences).

Variance from X days back. How much did XYZ stock move -- not from yesterday -- but from "X" days back. First screen also shows stock open, high, low, close, change, three smoothings of HV (historical volatility), range (high-low), and range as percent of closing stock price. So what does this mean? If you are buying options, you want big moves, if you are selling options, you want little or no move. This screen will help confirm or contradict your thinking about a stock's volatility.

Variance (bar chart). (see above). Here we take the variance from "x" days back function from the table (highlighted in green), and chart it.

Variance (histogram).   Answers the question: what percent of the time does a stock move "x" percent? Meaning: typically sellers want to see a fat middle, i.e. little movement;   buyers want to see "fat tails," i.e. explosive moves.

Historical volatility line chart. 3 smoothings.

Preferences allows complete program customization. (Variance shown here)

Position Manager

Log your positions
Includes calendar rolls, other options sales
P/L, Greeks, etc.
Export to Microsoft Excel

SUMMARIZING . . .

Stable, fast. Advanced programming employs numerical methods, written in newest Microsoft language C# on the .Net foundation. Option Wizard® Scan runs lightning fast, rock stable.

Free data. Your choice of data: real time data via eSignal (subscription fee) or free delay data

Intuitive: this one web page explains, one click runs the program whether analyzing volatilities, finding trades, analyzing spreads, reviewing risk curves. Need further assistance? Please email.

Actual market prices, theoreticals, complete analysis. No looking up prices.

Low, low cost: at $99, one time, no additional or recurring fees, Option Wizard® Scan costs a fraction of legacy programs costing $6,000 and up, or web-based programs with annual $895 subscriptions.

Free trial. Option Wizard® Scan runs 7 days free, fully functional. We invite you to sign in at http://option-wizard.com and experience its power, and ease for yourself. Email questions, comments. Our goal is simple: to provide you the tools you need to increase profitability.

The competition. During your seven days with us, we invite you to compare us with the rest. Then, purchase your copy in the store at http://option-wizard.com. If you purchase within seven days of your registration, we will say thank you with a publication or companion software, on your email request, making this an even more unbeatable value.

CHICAGO -- Option Wizard is a registered trademark of Sarkett & Associates, Inc. -- 11148489