OEC Trader by Open E Cry

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In his remarks on the final panel, Frank Partnoy mentioned something I missed when it came out a few weeks ago: I write periodically about the perils of bad software in the business world in general and the financial industry in particular, by which I usually mean back-end enterprise software that is poorly designed, insufficiently tested, and dangerously error-prone. But this is something different.

Microsoft Excel is one of the greatest, most powerful, most important software applications of all time. But it provides enormous capacity to do quantitative analysis, letting you do anything from statistical analyses of databases with hundreds of thousands of records to complex estimation tools with user-friendly front ends.

And unlike traditional statistical programs, it provides an intuitive interface that lets you see what happens to the data as you manipulate them. As a consequence, Excel is everywhere you look in the business world—especially in areas where people are adding up numbers a lot, like marketing, business development, sales, and, yes, finance.

For all the talk about end-to-end financial suites like SAP, Oracle, and Peoplesoft, at the end of the day people do financial analysis by extracting data from those back-end systems and shoving it around in Excel spreadsheets.

I have seen internal accountants calculate revenue from deals in Excel. I have a probably untestable hypothesis that, were you to come up with some measure of units of software output, Excel would be the most-used program in the business world. But while Excel the program is reasonably robust, the spreadsheets that people create with Excel are incredibly fragile.

The biggest problem is that anyone can create Excel spreadsheets—badly. While all software breaks occasionally, Excel spreadsheets break all the time.

What if the error had gone the wrong way, and the model had incorrectly doubled its estimate of volatility? That kind of error would have been caught. Errors that lower VaR, allowing traders to increase their bets, are the ones that slip through the cracks.

I think there is a more fundamental problem, the model distorts the nature free pdf on option trading software for excel 2013 the reality. At the time spreadsheets were relatively new. My boss observed that the spreadsheet made people think that real estate was a bond free pdf on option trading software for excel 2013 not rewal estate. With my work, I use Excel spreadsheets every day but when I start to develop a project, I have in my mind a system with an engine the spreadsheet with formulas and macros and with an user interface, with icons that prevent at users to do anything not provided.

So, the core of the spreadsheet can work without modications, and results can be more reliable. That, and legacy systems are slow to upgrade. Points out the fact that spreadsheet models should be reviewed and checked by other experts BEFORE they go into production systems. I have no sympathy for any of this. Programming IS an extreme sport. Leave it to the professionals, and do NOT free pdf on option trading software for excel 2013 it yourself at home.

That one-sided incentive structure means that we should expect VaR to be systematically underestimated. As a software enginner what you describe is all too common. Excel is very powerful because it is relatively easy to use, but its ease of use means anybody can free pdf on option trading software for excel 2013 a program using the tool which can be very difficult to understand or test.

What amazes me that the model was not tested more thoroughly considering the risks if there were systematic errors in the calculations. The users are dumb so prevent them from doing anything other than what you build the tool to do. I have been stating for many years at my current employer that we should not be running our business on an Excel spreadsheet, even when we run SAP. There is far to much downside risk and limited upside from the productivity. Additionally, I free pdf on option trading software for excel 2013 it makes people dumber and less likely to critically think through situations.

This tool is invaluable in debugging complex spreadsheets. I guess this is where python and its libraries come in. You can build reliable models using code. One of my pet peeves is text documents where empty paragraphs are used to set paragraphs visually apart. Another one is the abundance of ad hoc formatting which increases size of documents and makes them look odd. I just like the old copy and paste format. There is a rich literature accessible through Google Scholar on the deficiencies of Excel for ststistical calculation and the unwiilingness or inability of Microsoft to fix them.

Much better is the open source and free Excel clone, Gnumeric. But I think this will probably be my last post here. Too much time intervals between posts, too many tease links to other sites where after years of loyalty to the two hosts we get the crumbs from the paid sites tossed at us for increased link hits.

But class snobbery, and judging people on socio-economic issues was kind of what I had thought this site was supposed to be fighting against, not encouraging.

I hope you reconsider you decision to not continue making your ideas known on this blog. I, for one, look forward to what you have to say. I discovered, 35 years ago, when I bought my first microprocessor-driven computer, that it is impossible to create a proper double-entry book-of-accounts using any spreadsheet, no matter how it is designed. There are four fundamenta variables in a proper book-of-accounts: Pacioli calls the bookkeepers attention to these four variables in A.

Until these bookkeeping fundamentals are understood by the software community, and the accounting software designers know how to create the four-way isomorphic balance by using a serious programming language, the banks will continue to steal from the monetary system. Right now, James, your above essay has free pdf on option trading software for excel 2013 right to take up the bandwidth that you are wasting by your not knowing where first base is located in the playing-field of software-driven free pdf on option trading software for excel 2013.

The FT Alphaville team have a very good overview of this — http: Actually, the real problem with PP is that it, at root, has no actual value at all. Anything that can be communicated with PP can be communicated better with some other media: Heck, most presentations and meetings are really unnecessary.

Second problem is documentation. Excel spreadsheets are notorious for being poorly free pdf on option trading software for excel 2013. Third, mobility of data. Moses, I have to agree with you. Baselinescenario was created to discuss the reasons behind and way forward from the Crash of and had its greatest relevancy then. Simon and James have spoken their peace, written their books, and are moving on as free pdf on option trading software for excel 2013.

There needs to be a change in national and Beltway politics that can reestablish a nexus of pragmatic governance for this site to regain its vitality.

I totally disagree with this disgusting comment!!! For after tax cash flow analysis in Engineering Economics classI once programmed in Excel the entire IRS Depreciation schedule with just two inputs and a lot of conditional logic. I found an error in the published tables which they fixed. In addition to the wonderful flow visualizations, they provide the data we need in spreadsheet format for further analysis. I like Excel because I can check the individual calculations which are hidden by most programs.

It that way the spreadsheet is the most important application of all time. When statistics and numbers are manipulated to favor the ruling classes agenda, and since we it has been proved that politicians, at this point in timecan no longer distinguish right from wrong, or right from the left, or anything other than the current status quo. We really do have a dysfunctional congress, that takes money candidates over quality ones. Until then we must put up with disinformation politics, and economics, because it has become the norm.

Blaming Excel is like blaming guns for gun crime. The problem described is NOT a technical one. Its social or organizational. Where is the training? Where is choosing the right tool for the job? Where is the technical oversight and leadership? Excel, Powerpoint and Access all suffer from similar issues — they are tools which are overused by amateurs. Have not heard that name in a while… Excel modelling is only as reliable as the person designing it.

Sloppy code results in unpredictable and unreliable performance. Investing the time in proper architecture using vector math, for instance, where possible to simplify calculation touch points enhances the performance of the model created. It also makes it easier to audit. I think we will be using it in business for the foreseeable future because, despite their best efforts, little has emerged to replace its broad functionality.

That being said, if you are going to rely on it, you should invest the time to be a black belt. I think some of the comments lose sight of the original facts. I agree with the original post that it is too easy to make such errors in Excel. Excel should probably not be used for production calculations but when it is, free pdf on option trading software for excel 2013 model should be properly tested and documented. I wonder what the state of the art is for standards and tools to document and test spreadsheets.

I just discounted everything you wrote because of your hysterical and gratuitous Microsoft bashing. By the way, Lotus had an innovative commanding system but still essentially ripped off VisiCalc and Multiplan. Excel was the first with a GUI. David professional software engineer: Your point concerning the importance of experience, training, and competence is well taken. Having said that,… Free pdf on option trading software for excel 2013 all due respect for your doubtless considerable expertise in building software that does the work it is designed to do, please bear in mind this well established and humbling fact: Every human being is subject to marvelously seductive illusions of attention, memory, confidence and knowledge.

Awareness of their existence and power immunizes none of us against these illusions. Self-deception afflicts each of us, bar none. This error likely had the effect of muting volatility by a factor of two and of lowering the VaR.

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Futures was more popular among the two until the market meltdown in after which the popularity of options has increased tremendously, much more than futures today. Following are the reasons which probably attributed to the increase in popularity of options on the NSE:. For holding a future position, you would need NSE stipulated margins which would work upwards of Rs based on what future contract you are trading whereas in options a trader with even Rs in his account could take some kind of an option position.

Future positions have unlimited risk, whereas in option buying the risk is limited to the premium you are paying. STT Security Transaction Tax charged by the government for Future is charged on the contract value whereas for options it is charged on the option premium. Option Strategy is a tool which we have introduced on Zerodha Trader which suggests you and helps build option strategies. Find following brief on how to use it: Login to ZT and make sure you launch plus while logging in.

Option Strategy tool, based on your view suggests you various option trading strategies and their payoff graphs. As an example, if my view is that nifty will stay in the range of and for this expiry NOV First step is for you to add all the nifty option strikes in this range on your market watch, so add — Calls and puts with November expiry.

Visit this blog to know how to add options onto market watch. Once you give a view the tool will suggest you 5 different strategies, as shown below. For the example, my view is that nifty will stay between to for Nov expiry. My View is that market will remain neutral that means neither bearish nor bullish and I also feel that market will be in a very narrow range.

This suggests me 5 different strategies as shown in the pic below. If you are not able to see the prices in the strategy section, click on the restore button as shown below. The window will look like below when you click on the restore button and the prices should start refreshing as the data is fetched from your market watch. So Ensure that the option contracts mentioned is available on the market watch as mentioned in point 2.

See the Pic below:. Once you have decided to take an option trade, if it involves writing options selling options , use the Zerodha SPAN calculator to know the exact margins required. Positions like the above will have margin benefits as they are partially hedged. But when you write options i. So to sell calls of nifty first and then buy back you would need almost 30k for an overnight trade. This margin goes down for a strategy mentioned in the above pic because the various option postions are counteracting each other.

Yes you can trade naked options i. Use this tool to help setup option strategies, study the payoff graph and proft trading options at Zerodha.

Madhan, we give margins for option writing intraday , pretty high actually. Hi sir , for option writing in Bank nifty Weekly Options for overnight Position what is the margin required, i have checked in calulator it is showing around per lot is this the right margin for overnight Position in option writing ………..

Hey Venky, the margin requirements are defined by our RMS team based on the liquidity and prevalent market conditions. The weekly option contracts do not have enough liquidity to afford very high leverage.

Sir am new to it,am holding a account in zerodha,I want to learn the strategy of trading plz do refer for it,to whom I have to contact. Suggest you to look at this: Interesting tool very helpful for people like me who trade on options. So that I can open 2 or more graphs.

Arm, the above would be beneficial to people who have an understanding on options.. If I have 1L in my trading account, can I do the following option strategy. Sell 3 contracts of Bank Nifty March put for Buy 3 contracts of Bank Nifty March put for I want to hold the position for few weeks.

Please tell if my thinking is correct. Margin required for only writing put per lot is Rs For taking 3 such positions, you will need 45k in your account.. The way you have calculated margin requirements is wrong, that is why we have introduced http: Thank you very much for the prompt reply. I was wondering if you guys could open an official forum for Zerodha members so that we could help each other out instead of disturbing the faculty.

Hello, Is there a way we can exercise the options in Zerodha Trader? If so, can you please tell me how to do it? All options on NSE today are european now, which means you can exercise it only on the expiry day.

In any case on the expiry day all options get exercised by default, so need to have this facility as long as the options are european. In PnL 3rd screenshot in this write up only the Net premium paid is shown and not profit potential. How to check the profit potential? How to add my own strategy, if not available now, please make it available soon. Last is basically the last traded price and best is basically the best available price.

If both are the same, the result will show the same. In the payoff graph, and pay off, break even is missing, which is a key factor in determining which strike price to be taken for trade. The pay off graph is not showing the pay off in between the strike price, say nifty at , corresponding pay off is not showing, which is also vital. Abrar, Feedback taken, let me bounce it off my tech team and see how much time they will take to sort this. Also there is a error in bearish strategy, instead of market wont fall, it should be market wont rise.

Hi… I want to sell one lot put and one lot call. Is this for intraday or shall i carry till expiry… If that is for intraday, how much should i have to carry til expiry?

Hi Kindly go through the following scenario: Nifty trading at then took Iron Condor as follows: Yes Sreejith it will be, you cannot hold opposite positions of same contract on a single trading account.. In equities, this can be done only on an intraday basis. For Futures, you can sell and hold until expiry by paying the margin amount for holding that short position.

Option writers may not necessarily own the asset but they still take on the obligation to deliver the asset if the conditions are met for which they receive a small premium from the buyer of the option. Dear Zerodha team, I cannot see the implied volatility figures for options. The pop up window shows all values as zero. How can I sell the lot I bought back at ? Do I need to open a sell order for that or can I simply square-off the position like in equity?

Go to Admin positions and click on the open position and say square off, this will sell it at market. Could you tell me where is it located in that page? Or is it not visible during off-market hours? The starter pack is free of cost which includes option strategy, charting, and more. There are certain products on Plus which are paid, you can see more here: I have never traded a option but i want to do some trade in it.

For example Nifty CE was trading at around in morning. So to have profit shall i buy call or put option? And i know call is like long and put is like short position. So if market is bullish i shall buy call and if market is bearish i shall sell puts?

I am actually having a big doubt among the 4 thing And one more thing lets say Nifty CE is trading at then what margin i require to have a long position? Phew, you are starting at the very basic. Buy Calls, if the market goes up, premium will ideally go up and you can profit. But there are days when market could go up but calls premium could loose you money when the implied volatility drops, for example today, even though market is up call premiums are down.

When you buy calls, profits are unlimited but the risk is limited to the premium you pay. You can Short puts, when market goes up, put values will come down and hence if you are short puts you can profit. When you short options, the risk is unlimited and profit is limited to the premium you receive when you short the option. Since the risk is unlimited, a margin is blocked in your trading account similar to futures.

Long calls and short puts, ideally will make you profit when market goes up, but they are completely different in terms of how you make money and similarly with long puts and short calls. Nitin , i am new to this field , the link which you have provided doesnt have any pdf ,which can explain options and its characteristics.

Have you checked out Varsity? Our education initiative, has become quite popular. Hello sir please make me understand Buy price and buy average price and how is buy average price related to settlement price and why it changes on daily basis of options?

Confused with your question Praveen. If you buy 1 lot at Rs 50, your buy price will show 50 and buy average price will also show If you buy the second lot at Rs , your quantity will show 2 lots and your buy average price will now show 75, which is the average of 50 and I just cant understand how my buying Average price shoot upto On the trading platform, your profits for today will show based on the closing price of the options for yesterday and not based on your buying price and this is the reason you are seeing a loss and not profits on the platform today.

No there is no daily settlement on buy option positions, so if you bought on 29th May Rs will get debited from your account and when you sell at 80, Rs is credited to your account.