Trading New Strategies
Option is a financial instrument with a value based on its underlying securities such as stocks or bonds. The holder of an options contract can choose to buy or sell the underlying assets of the said options at or before a specific date at a pre-determined price. The investor pays a premium to buy the rights over the options contract. Call option allows the investor to buy the underlying assets at a specified price before the expiration date. Put option enables the investor to sell the assets at a specified price within a particular timeline. The pre-determined price of an option is called its strike price.
Determining the inefficiencies in option prices to accurately calculate strike prices comes among effective Trading New Strategies. Trade Smarter is an institutional-grade options pricing platform by Options-Quant which help in implementing this strategy. This platform has been curated by researchers from top universities.
Beneficial features of Trade Smarter platform
Trade Smarter accurately calculates strike prices using more than 125 pricing models. The trader gets a number of options of pricing models including the popular models such as Monte Carlo, Jump Diffusion, Black-Scholes, Merton-73 and American Options. The high accuracy of real-time price calculations is assured by models such as Polynomial, Romberg’s and more.
This platform has exhaustive data including concept breakdowns and instructions curated by top researchers which enable both newbie and seasoned traders to make informed decisions. The pricing tools cover a wide range of options such as FX, futures, equities and fixed income. Thus, the traders are able to exploit the pricing inefficiencies of multiple types of markets.
Trade Smarter can process thousands of option chains using complicated models at any given point of time. The high speed has been assured by the C++ programming language used to develop this platform which enables it to work in close proximity to the computer’s processors.
Advantages of using Trade Smarter
Trade Smarter can price any kind of option. Thus, it can be used for relative value trading which is one of the popular Trading New Strategies for options. For relative value trading, this platform can be used to compare two assets having similar characteristics such as implied volatility and price and then exploiting the differences. For instance, if an asset is overpriced as compared to another similar asset, the trader can short the over-priced asset and buy the under-priced asset to make a profit regardless of the direction of volatility.
Trade Smarter can be used to simulate market conditions to calculate prices of options owned by a trader at particular dates. For instance, a trader can determine almost exact prices of options owned by him/her by changing implied volatility parameters.
Event-based mispricing can also be determined with the help of Trade Smarter. The pricing models of this platform can be used to determine whether the market is over or under pricing any option prior to an earning event.
Conclusion
Trade Smarter is available for a one-time purchase only and does not need subscription. On making a purchase, a digital download of the app is received along with documents detailing the functions of the app.
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What is this platform?
The Options-Quant platform is an options pricing engine that is used to calculate inefficiencies in option prices according to various different pricing models. This includes options on futures, FX, equities, and fixed income. The models featured are used in various hedge funds, and are curated by researchers at leading Universities.
How do I use it?
Upon purchasing, you will receive a digital download of the application as well as a robust documentation that outlines the concepts, explaining how each function works.
E.g.; The overwhelming majority of our users make trades based on the model value of the option relative to the current market price. If MertonJumpDiffusion model estimates the price of an option to be lower than what the market price is trading at, the trader shorts the option and vice-versa. This strategy, also known as relative value trading, uses the platform to exploit pricing inefficiencies.
Can I make trades on the platform?
Currently, the platform is only meant for pricing the options. To submit trades you must use a third-party brokerage, like Robinhood or TD Ameritrade.
Which operating systems are supported?
Currently, we only offer the platform on Windows devices.
Does the platform use any external data?
The platform relies only on user-entered parameters. It does not connect to any external data source or API.