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 Step 8 |
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EXCEL OPTION CALCULATOR VERSION 10
STEP BY STEP MANUALStep 8: Probability calculator |
A sheet without buttons! Everything works with complex formulas in the background.
The left half of the page has all the input fields, the right half shows the results. |
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This image shows the settings for the Probability Calculator. As usual, there are defaults (which are taken from the position sheet and the SV tool) which can easily be overridden by entering your own values into the boxes with the blue double frame. |
The risk free rate is taken from the settings sheet, based on the number of calendar days used for the probability calculation. |
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| You'll find the probability of the underlying being above/below the target prices after x days, and below the probability of the underlying moving beyond the target prices at some time during x days - which can be a big difference.. |
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Standard deviation calculator The lower part of the screen deals with standard deviations. This is a statistical concept many advanced traders use. Find answers to questions like "What is the target price for a 2 standard deviation move within the next week" with this tool. The input fields are D27 for the amount of standard deviations E13 to override the amount of calendar days, and E9 to override the default volatility. |
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Contents  Probability calculator settings
Probability calculator results
Standard deviation calculator |
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