Free Download The Expected Return Calculator
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Assess possible positions using statistical analysis.
McMillan’s own analytical tool, the Expected Return Calculator, employs statistical analysis to assess intricate option positions and provide traders with a sense of the likelihood of a successful trade.
What’s the anticipated return?
The return one could anticipate from a position after a significant number of trials is known as the expected return. Regretfully, there is only one outcome from each investment we make in the actual world, rather than a vast number of outcomes that we can average. Long-term, nonetheless, one should demonstrate greater returns in his trading account or portfolio if he continuously invests in positions with higher predicted returns. Expected return takes into account all aspect of a strategy, including the likelihood of winning or losing money as well as the magnitude of gains or losses.
The Expected Return Calculator: Why Use It?
Investors and traders can quickly determine whether a certain option position is worthwhile by using the results of The Expected Return Calculator. Furthermore, a trader can only accurately assess several tactics to determine which is best—is a covered write or a diagonal spread the best trade?—by using anticipated return analysis. Perhaps a straightforward option buy is preferable. You can make a decision based on expected return.
How to utilize The Calculator for Expected Return
The trader starts by defining his position, which can be very complicated because it may involve a linear volatility skew in addition to several options and expiration dates.
For your personal reference, give the position a name.
Along with the commencement date, enter the precise dates you want to utilize for the “Evaluation Points” for your position.
Give details about the underlying security, such as its price, historical volatility, and symbol.
Enter any information on volatility skew or dividends that is relevant to the position you are examining.
Option Symbol, Type (put or call), Quantity, Expiration, Strike Price, Option Price, and Option Implied Volatility (which can be set to 0 and is automatically calculated) are all need to be entered for each leg of the option position.
The “Add Underlying” option can also be used to add more than one underlying to the position.
When you select the “Summary” tab, outputs are computed quickly and precisely. You can print them all and export them to Excel. Position “greeks” and predicted profit calculations at any number of user-specified dates over the course of the position are among the tabular outputs.
A synopsis of your contributions is given.
Delta, Gamma, Theta, Vega, and Rho are among the Greeks that are calculated and displayed.
Every data point for every leg and the overall position displays the Expected Dollar Return.
At every data point, the full position’s Expected Percentage Return is given.
Graphical outputs under the “Plot” tab illustrate the expected behavior of the position at the user-specified intervals. You can quickly see how much money you would anticipate making or losing at any underlying price and at any point throughout the position’s lifecycle with the help of the Expected Return calculator.
More about The Expected Return Calculator:
- Analyze complex positions involving multiple options
- Encompasses volatility skews
- Date Calculator functions
- Profit/Loss Graph, including user-defined time lines
- Expected profit clearly marked on profit graph
- Legend on profit graph allows easy identification of important data points
- Tabular display of profit information available as well
- Position “greeks“ are shown
- User-defined commission rates allowed
- Outputs can be exported to Excel
- Save data files to your hard drive
- Print functions available for all outputs – graphic or tabular
- 30-page User Manual included under Help Topics
System Requirements
PC-Operating System Compatible: Windows® 2000, XP Home, XP Pro, 2003 Server, Vista, Windows 7* (download only), Windows 8* (download only), Windows 10* (download only).
*NOTE: Software will not run on any MAC OS. The CD-Rom will not work on Windows 7, Windows 8, and Windows 10. To install on Windows 7, Windows 8, or Windows 10 choose the DOWNLOAD option.
Installation Instructions
The software is delivered as a downloadable ZIP file. After downloading the file to your computer:
locate the file and do one of the following:
- To extract a single file or folder, double-click the compressed folder to open it. Then, drag the file or folder from the compressed folder to a new location.
- To extract the entire contents of the compressed folder, right-click the folder, click Extract All, and then follow the instructions.
Double click the ExpReturnSetup.exe to file to run the software installation.
