Option Value Calculator - Option Value Calculator Online | Motilal Oswal

Options Value Calculator


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              How can a Options Value Calculator help you?

              Options trades can yield greatest returns in the event the trades go in a positive direction.
              This is because stock prices may go a lot above the strike prices.

              Invest with confidence in the NIFTY 50 and the Bank NIFTY
              Options trading becomes easier if you can predict values to execute options
              Options may prove to offer less risk compared to trading in direct equity

              The Options Value Calculator lets you get a fair idea of any options contract and the direction of its flow. Profitability may be at your doorstep if you use it!

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              Higher Returns

              Get the benefit of high percentage returns with options

              Strategic Moves

              Predict options trading momentum and get gains

              Cost - efficient

              Trading in options offers cost-efficiency and mitigation of risk


              Option Value Calculator FAQs

              1. What are options?

              Options can be termed as financial agreements or contracts between two parties. These contracts give buyers/sellers the right to buy an asset or sell it at a certain date, and at a specific price. The set price is known as the “strike price”. Here, this agreement stipulates a right, but no obligation to undertake the transaction. Hence, individuals can choose to exercise the contract if they believe that potential benefits are on the horizon. Options fall under the purview of “derivatives” in trading, as assets are derivative products. This means that each contract “derives” its value from the underlying asset, which could be a commodity, stock, indices, bonds and even currency.

              2. What are the kinds of options?

              There are technically two kinds of options. There is an American option and a European option. In an American option, the contract may be executed anytime prior to the expiry of the contract and not necessarily on the date of expiry. In the European option, contracts must be executed only on the date of the expiry of the contract. In India, all options are aligned with the European method of contract execution

              3. What is an options value calculator?

              Derivatives or options are contracts to buy or sell any underlying asset defined in the contract, but at a set price and by a fixed date. If traders who deal with options contracts have an idea of the prices of underlying assets in the future, they can choose to execute contracts or not. This is where the options value calculator comes in. It is an online tool that helps traders to trade in NIFTY options or in option contracts to do with stock. The calculator simulates the price outcomes according to a contract, and also takes into account any changes that may affect the price of underlying assets till the expiry of the contract.

              4. How is an options value calculated?

              The value of any option is the current market rate in the market at which the options contract is valued. This means that the value of the underlying asset against the potential strike price has to be considered. The difference between these two will be the value of the option.

              5. Is an options calculator accurate?

              Options calculators give you an estimate of values and prices. As with any other online calculator, you may use return rates as advertised by RBI, but these may be prone to change. There is also the fact of “implied volatility” (the expected volatility of the option) which is simply estimated, and not precise. This largely depends on demand and supply factors. Nonetheless, you can gauge an options contract, somewhat, to decide whether you wish to execute the same.

              6. What are the Benefits of using the Options Value Calculator?

              Options contracts are a great way to get into trading, and to diversify a portfolio. These are the benefits you get by using online tools to estimate prices and values, and the outcome of a contract:

              • It’s an online tool which is easy to use and gauge whether your options contract will move in a positive direction to yield profits in the future.
              • It is easily available on most financial portals.
              • It is good for novice traders to get into options trading, giving them some confidence in this kind of trading.

              7. What are the key inputs or dependent variables to be plugged in the options value calculator?

              To get the result or the output, the user of an options calculator has to enter the variables that follow:

              1. Underlying asset strike price

              2. Underlying asset market price

              3. Interest rate

              4. Expiry date

              5. Transaction date

              6. Estimated volatility (“implied volatility”)

              7. The kind of option (a put option or a call option)

              8. Yield of dividend

              Based on the variables that users enter, the outcome may be positive or negative for the trader to take a call on whether to exercise the right to execute the options contract.

              8. Can this tool be used for the index option also?

              This is a tool that can be effectively used for two main indices - the Bank NIFTY, and the NIFTY 50. Also, this tool may be used for stock options.