https://www.matthemsteger.com/categories/options/ Recent content in options on Matt Hemsteger's personal site Hugo -- gohugo.io en-us Sun, 25 Nov 2012 01:22:20 +0000 https://www.matthemsteger.com/posts/probability-of-touch/ Wed, 18 Jan 2012 17:49:34 +0000 https://www.matthemsteger.com/posts/probability-of-touch/ I was looking for a mathematical formula for the probability of a stock price touching a strike price of an option any time during it’s lifetime, assuming the stock price follows a traditional Black-Scholes model of Brownian Motion. I found some traction from from http://quant.stackexchange.com/questions/235/probability-of-touching, but unfortunately the equation did not seem to work according to freely available online calculators. My understanding is that ThinkOrSwim has this as a “proprietary” calculation on their options, however I don’t have that platform, and would like to calculate this “in house,” so to speak. https://www.matthemsteger.com/posts/gems-from-thinkorswim-spread-hacker-terms/ Sun, 25 Nov 2012 01:22:20 +0000 https://www.matthemsteger.com/posts/gems-from-thinkorswim-spread-hacker-terms/ So I like to trade options and have recently switched to TD Ameritrade, who has a fairly robust desktop platform, thinkorswim. In fiddling around, the documentation is alright, but some of the terms and details are not really gone into, leaving you scratching your head. In the Spread Hacker section, I was curious about a few different parameters since I primarily want to trade vertical credit spreads. Those columns are “Max Profit”, “Prob of Profit” and “PL/Margin”.