How to Use Excel to Create an Options Calculator
Microsoft Excel is a versatile and powerful program that you can use in many situations. You can use Excel to edit and create spreadsheets, analyze and view information, create visual data and PivotTables and make charts. Options for stocks are complicated investment calculations that are given pricing that is related to many variables. Excel can help you accomplish this type of work easily, with an add-on and good practices.
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Things You'll Need
- Microsoft Excel
- Options Pricing Add-On (Can be found below in the references)
Instructions
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Open your wed browser, go to the Windale Technologies web site and download the free Stock Options Pricing and Analysis Software. They provide simple on-screen instructions for the download and install. Once finished, open Excel and start a new worksheet.
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Create a spreadsheet that shows the key variables for an option price on the sheet. For example, a standard call option spreadsheet should have individual cells which hold values for each price of the stock, the contract strike price, and the days until expiration. These cells can be placed anywhere and labeled accordingly.
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Write a formula in a separate cell on the same worksheet. The formula will calculate the option price that you based on specific parameters. Use the "option pricing functions" included in the Excel add-on in the formula. For example, use the "BS_CALL" option from add-on for calculating call option prices. The cell references for the variable pricing within the formula can be used.
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Adjust the option pricing variables that are being shown on the spreadsheet and look at the calculator and change your option price basing it on the edits.
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References
Resources
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