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Profit & Loss Calculator FAQs

  • What does the Profit + Loss Calculator do?

    The P + L Calculator makes it incredibly easy to chart the profit and loss potential of your trades before you place them, or study the profit and loss potential of your existing positions.

    Enter as many options legs as you wish using the integrated options chains; your line graph will calculate in the main window automatically. A table summary of profits or losses around your breakeven point will appear to the left of the graph.

    Sliding the pointer over the line graph lets you see how your profits or losses change as the underlying price does. The corresponding tables show you your risk parameters and analytics for the entire position.

    Horizontal sliders below the line graph make it easy to see how changes in volatility or time to expiration affect your profitability and price targets.

  • How do I enter an option strategy into the Profit + Loss Calculator?

    Enter an underlying stock, index or ETF symbol in the "Add From Chains" field. (If you don't know the symbol, just head over to Quotes + Research > Quotes + Charts + Research, click the "Symbol Lookup" link next to the quote entry box, then enter the company name.)

    Once you've entered your underlying symbol, the Options Chains listing all options on this underlying will pop up in a separate window. If you don't see the option chain window make sure your pop-up blocker is set to allow pop-up windows from this page.

    You can add a position to the P + L Calculator from the Options Chains as follows:

    To add the underlying stock or ETF you can simply click the "Add Underlying" link next to the "Go" button in the Options Chains window. Note: you will not be able to add the underlying if the underlying is an index like the S&P 500 (SPX). This is because it is not possible to buy or sell an actual index.

    You can then choose as many option legs as you like, in one of two ways:

    • Click on the bid price link to indicate a sell, or the ask price link to enter a buy. This can be done for the underlying or to add an individual option contract.
    • An alternative way to add many options at once is to use the checkboxes next to the option contract. Click the checkbox once to indicate you want to buy the option, click twice if you want to sell, and click a third time if you want to clear the field. You can also clear all the check boxes instantly by using the "Clear All" button.

    When you've selected all the legs you want to chart, click the "P&L Calc" button and the pop-up chain will close and add the all the legs to the P + L Calculator.

    Once the strategy is entered into the calculator your line graph will be drawn in the main window automatically. The graph will display the profit and loss as of the day the trade was entered and at the expiration date.

    A table summary of profits or losses around your breakeven point will appear to the left of the graph. This table is based on today's date (blue line), not the expiration date (gold line). The table will change as you change variables inside the calculator, for example, days to expiration or volatility. If you would like to see your breakeven(s) at expiration just move the days to expiration slider all the way to the right or type "0" in the "Days to Expire" field.

    In a glance, the P + L Calculator shows the combined potential profit or loss of your entire trade, including all legs, as the underlying security price moves up or down.

  • Can I remove the expiration line from the Profit + Loss Calculator graph?

    Yes, just click on the tools icon inside the graph.

  • I entered an options trade with multiple legs, but I'd like to see the profit and loss potential for each leg graphed independently on the same graph. How can I do this?

    If you would like to see graphs of each option charted individually, please check the "Legs" radio button in the center of the page, then click the "Calculate" button that is right next to it. The legend for the different option contracts graphed in the chart is located on the top of the applet. Note: the profit and loss table on the left will still show the net profit and loss for the position.

  • How can I see how price movements in the underlying affect the profit or loss potential of my position?

    The dark-blue horizontal line in the middle of the graph shows your break-even point, i.e. where your profit would equal zero.

    Slide the pointer over the line graph and cross-hairs will appear. Use this feature to pinpoint your exact profits at a given price-level for the underlying. If you click on the chart it will fix the crosshairs and display your profit or loss at that specific underlying price; this will also highlight that number on the bottom of the profit and loss table on the left-hand side of the graph. Click the mouse again to release the crosshairs.

    To plot points far away from the current price of the underlying use the "Chart Price" field on the lower right hand side of the screen. Type in a specific price and then click the "plot" link that is next to the box.

  • Can I zoom in or out of a profit and loss graph?

    Yes. To zoom in or zoom out on the line graph, please use the "+ and -" graphic inside the chart:

    To zoom the x-axis please use the horizontal "+ and -"; to zoom the Y-axis please use vertical "+ and -".

    You can also drag the graph up or down, left or right, to see any part of the full picture. To reset the zoom and the rest of the data in the chart use the "Reset" button located on the middle of the screen.

  • How can I refresh the quote data for an existing profit and loss chart?

    Click the "refresh" link in the upper left corner of the line graph. This will refresh the last trade price for the underlying. If you'd like to refresh the option prices also, please be sure to click on the lock next to the option price field and change the color of the lock to green before the refresh button is clicked. This only refreshes the price data. To reset the chart back to the original data and price point on the chart use the reset button in the middle of the screen.

  • Can I change the assumptions of the Profit + Loss Calculator and see how it affects my potential profits or losses?

    Yes. The P + L Calculator lets you streamline even complex, multi-leg options strategies, so you can pay attention to a single figure: the changing movement of the underlying. At the same time, the P + L Calculator gives you the control to fine-tune assumptions that may affect your profitability forecast.

    To adjust for changing volatility, use the horizontal slider below the line graph to the far left. You can either enter a figure in the text-entry field, or drag on the slider with your mouse.

    To measure changes in volatility in relative terms, choose "Relative" from the dropdown menu on the volatility slider. In this example, if current implied volatility is 16.25%, a 10% relative move would translate to 17.875% (16.25% x 0.10 is added to the original implied volatility, because the relative move here is positive).

    To measure changes in volatility in absolute terms, choose "Absolute" from the dropdown menu. After a 10% absolute change, for example, volatility would equal 26.25% (10 + 16.25).

    To see how time-to-expiration affects your potential profitability, use the horizontal slider below the line graph to the far right. You can change this value in one of three ways:

    • Type a figure in the text-entry field
    • Drag the horizontal slider with your mouse, or
    • Click on the calendar icon and choose a date. (Expiration dates are highlighted.)

    The Days to Expire slider populates automatically with today's date.

    To adjust assumptions about dividends, interest rates or contract size, click tools icon inside the graph. Then select a tab. You can graph the individual Greeks for your strategy under the Display Contents tab.

    The Options Pricing Model tab even lets advanced options traders see the effects of adjusting the model used by the calculator.

  • How can I adjust the quantity of shares or option contracts graphed in the strategy?

    Below your line graph you'll see a table of all the option legs you've entered. This section summarizes key Greek values and net bid / ask for the total position, as well as the price used for each individual leg. If a buy it assumes it was bought at the ask price. If a sell it assumes it was sold at the bid price.

    "Chart Price" box shows whatever price for the underlying you currently have displayed in the line graph. As you adjust this price up or down, all the analytics adjust dynamically, too. In fact, any values you change in this table - contract quantity, for instance - will update the line graph after the calculate button is clicked.

  • How can I remove an individual leg from a multi-leg options position?

    To remove an individual leg from the graph, enter uncheck the box to the left, or use the blue-arrow power button to the right of the contract to remove it completely from the table. You can also trade the individual option or see a full chain of options on the underlying using this power button.

    To remove all of the options with one click please use the "Remove All" link on the far left. Please don't forget to remove all before you decide to view a graph on a new underlying.

  • Can I change the option prices to my original cost basis or "flip" the strategy?

    Yes. You can flip the strategy, i.e. turn a buy into a sell or vice-versa, by choosing "Flip" link on the far left.

    To change the price of your option manually you can "lock" and "unlock" the price by clicking the lock icon next to the price field. Make sure the lock is green and then type in your preferred price. Uncheck a box in the field it will remove that option from the drawn graph and update the position (net) Greeks accordingly.

  • How can I place a trade directly from the Profit + Loss Calculator?

    If you would like to enter a trade make sure the options you would like to trade are checked. Then select the proper strategy in the drop down menu and click on the trade button.

  • Are there any technical requirements for my computer to run the P + L Calculator successfully?

    The P + L Calculator runs on JavaTM technology. If you do not have Java Virtual Machine (version 1.3 or higher) on your computer you can download and install it here:

    The download process is fully automated and takes just a few minutes.