OptionEasy Pricer (OE Pricer) User Guide

OptionEasy Pricer (OE Pricer) User Guide

The OE Pricer is designed to quickly price options at a specific price level or date or volatility. It is best used in conjunction with the deep-in-the-money long calls and puts strategy.

Access to the OE Pricer is reserved only to our OptionEasy and OptionEasy Bootcamp members.


Understanding the OE Pricer

A) OE Pricer Usage and Layout

The OptionEasy Pricer is commonly used to determine the amount of premium you should expect to pay when you’re placing a long call or long put trade. It can also be used as an educational tool to improve your options trading knowledge.  The application is separated into three main sections: Input Stock Details, Option Details, Results.

At the very top of the application, you’ll see a “Call” and “Put” tab on the left and a “Reset” and “Info” tab on the right. Right below this is a set of instructions to help you use the OE Pricer. 

You’ll also find little grey information buttons beside each of the section headers. This contains information of the various fields within the section. 

There are two ways in which you can utilise this tool:

1) Semi-automated way

  • Use the OE Pricer to price options for a particular stock

  • Recommended for new options traders or new users


2) Manual way

  • Manually input data to price an option based on your preference

  • Reserved for the more experienced users and traders


B) OE Pricer Icons

Earnings Bell

  • The earnings bell will only light up if you key in a stock that is reporting earnings within the next 20 days

  • This icon will be greyed out if there is not upcoming earnings or when the stock ticker field is empty  

  • Click on the icon to display more information on the stock’s earnings


Yahoo Finance

  • This YahooFinance icon will appear under Section 2 if you key in a valid ticker into the “Stock” field

  • It is hidden if the “Stock” field is empty

  • It displays all the available call and put options on the stock on YahooFinance


Option Info

  • This icon appears under the “Option Strategy Leg” window which is launched when you click on “Select an Option Leg” under Option Details 

  • The “Select an Option Leg” option will only activate if you key in a valid ticker into the “Stock” field

  • Clicking on this launches a separate window that displays all the option information for the selected option leg


How to Use the OE Pricer

Semi-Automated Way

You will fill in the “Stock” field and “Select Option” field under this method.

Step 1: Select “Call” or “Put” 

Step 2: Under “Input Stock Details”, input a stock ticker into “Stock” 

  • The tool will auto-populate all the relevant stock details into their respective fields

  • You may choose to change these information according to your preference

  • We recommend that new traders or users use the default values as a starting point. 

Step 3: Under “Input Stock Details”, update “Target Stock Price”

  • The target stock price field will be based on your entry or P1 price.

Calculation
Target Stock Price
Premium for entries
Entry price on the stock
Premium for P1
P1 price on the stock

Step 4: Under “Input Stock Details”, update “Target Date”

  • This step is ONLY applicable if you are using the OE Pricer to calculate the premium for your P1

  • Change the target date to at least 5 trading days (exclude weekends) from the default date

Step 5: Under “Option Details”, click “Select an Option Leg”

  • You can skip this step if you are using the OE Pricer to calculate the premium for your P1

  • Select your preferred expiration date from the Option Strategy Leg table that pops out

  • Scroll down the list of options displayed under your selected expiration date and click on the options ticker to select your preferred option 

  • Strikes highlighted in blue are “in-the-money” while strikes highlighted in red are “out-of-the-money”

  • You can also click on the Option Info icon located beside the options ticker to display information on that particular option leg. To select that particular option, simply click on the “Select” button within the information window.

  • Upon selecting an option leg from the strategy leg table, the tool will auto-populate all the relevant option details into their respective fields 

  • The premium is currently set to the “Ask” price for a more conservative calculation. You may choose to update this to the “Mid” price (middle price between the bid and ask). 

Step 6: Under “Option Details”, update “Quantity”

  • Update the quantity field to the amount of contracts you plan to trade

  • The default quantity is set to 1

Step 7: Under “Results”, click “Calculate”

  • Delta 

- Ensure that it satisfies the deep-in-the-money strategy criteria (Delta > 0.7).

- If the delta is < 0.7, repeat Step 5.

StrategyTips to Increase Delta
Long CallSelect a lower strike option
Long PutSelect a higher strike option

  • Leverage Multiple 

- Ensure that it satisfies the deep-in-the-money strategy criteria (2.5 < Leverage Multiple < 6.5)

StrategyTips to Increase DeltaTips to Decrease Leverage
Long CallSelect a higher strike option
Select a lower strike option
Long PutSelect a lower strike option
Select a higher strike option

  • Fair Value 

- The option premium at your target stock price

- This is the amount you’ll use when keying in your “Limit” orders on your brokerage platform

  • Intrinsic Value and Time Value

- The option’s fair value is equal to the sum of the intrinsic value and the time value

- This gives you a breakdown of the values used in the fair value calculation

- They are also expressed as a % of the option’s fair value for your reference


Manual Way

The “Stock” field and “Select Option” field will be blank under this method

Step 1: Select “Call” or “Put” 

Step 2: Under “Input Stock Details”, update all the fields (except Stock) according to your input preference

  • Volatility Period

- We recommend selecting a volatility period that corresponds closest to the number of days of the duration of your trade

(e.g., use the 6-month period if you’re analyzing a 6-month option).

- The default setting uses a “Minimum” volatility period

Step 3: Under “Option Details”, key in the required option information

  • Quantity/Strike Price/Premium

- The application will produce an error message if you key in a “0” into these fields

Step 4: Hit Calculate



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