Determining if your Option is Over or Under Valued: The Options Plug-in contains two indicators used to determine if an option is over or under valued. The indicators available are Options Strike Value and Strike Price.
Selecting the OSV or STRK Indicator: To view the Options Indicators you may choose to display them from three separate locations:
1. The Indicator Button Bar: To select the OSV or STRK indicators, click on the corresponding button on the Indicator bar. You may also change the put/call strike that the indicator is based on from the Indicator bar. See screenshot below:
2. The Right-Click Indicator Window Menu: Simply right-click inside the Indicator Window to view the menu. Highlight and then left-click to select the indicator. You will notice that the selected indicator is shown with a check mark below:
3. OSV/STRK Section: Under the My Defaults or My Chart Settings in Program Options.
1. Strike Price Indicator: The lines that make up the OSV indicator are
the Black and Scholes Theoretical and the Reported Market Value.
2. Style and Color: To change the line style, click on the drop down
menu and choose from Solid, Dashed, or Dotted lines. To change the color
of the line, click on the corresponding color box and choose a new color
from the Color Palette.
3. Options Strike Value: This indicator is a histogram style chart
measuring Under and Over Valued Options.
4. To display the Strike Price Indicator or the Options Strike Value,
select the check box in front of the indicator.
5. Ruler Bar.
6. Preview Window: This window allows you to make changes and preview
them before saving them.
7. To apply the changes you made to all open charts (listed in your
Active Charts list) click on the "Apply to active charts" button. To
restore the software defaults to the Options Indicators, click on the
"Restore Factory Defaults" button.
8. Help: Information from the manual has been integrated into the
software. When clicking on the "Help" button, you will get specific
documentation based on the location of the button.
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This indicator displays the theoretical option values vs. the actual option price value for a specific put/call strike price. By looking at these two lines you are able to determine if the option price is under or over priced.
Example of the Options Strike Price in Track 'n Trade Pro:
The Strike Price Indicator (STRK)
This Indicator also displays the theoretical option prices vs. actual option prices. However; this indicator displays them as a histogram. The positive values represent over-valued and the negative values represent under-valued options. See the example below:
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