Note: To find the spreadsheet, go to tastytrade, search for the video "Spreadsheet for Calculating Expected Moves" and find a link to the spreadsheet in the summary below the video.
When one of our Rising Stars comes to town they invariably want to share their spreadsheet with us. We have an in-house star in the field of Data Science, Michael Rechenthin, Ph.D., aka Dr. Data. Today he unveils a very useful spreadsheet to share with all tastytraders.
Mike said, “Data Science is about changing data into knowledge – making data actionable. I’ve previously explained the math around calculating a stock’s expected move based on its option prices. Today I’ll show my spreadsheet based on that segment.” “Calculating Stock Expected Moves” from April 29th, 2015.
Mike provides us with and then walks through all the components of his spreadsheet. The spreadsheet gives us the description,dollar per tick, current price, notional value and IV once we put in the symbol and amount of future contracts or shares. The spreadsheet also gives us the P/L expected range for 1, 2, 3 and 7 days on a given position. If the underlying price changes by a certain percentage, the spreadsheet provides the implied probability of that underlying closing above or below that amount over the next 1, 2, 3 and 7 days.
Plug the pertinent information into the yellow boxes and the spreadsheet constantly updates its information as the product moves in real time (see the note above). Dr. Data, with help from Tom and Tony, take you through the use of this program and the benefits. Download the appropriate spreadsheet and enjoy.
Watch this segment of "The Skinny on Options Data Science" with Tom Sosnoff, Tony Battista and Dr. Data (Michael Rechenthin, Ph.D), for an explanation on how to use this incredible spreadsheet, a valuable tool for your trading produced by Dr. Data.
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