What is an option calculator?
An option calculator is a tool that estimates the fair price of an option and its Greeks from the spot price, strike, days to expiry, implied volatility and interest rate, usually with the Black-Scholes model. Traders use it to check whether a premium is cheap or expensive and to see how it would change if the market moves.
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How do you use an option calculator?
Enter the underlying price, the strike, the expiry date, the implied volatility (take it from the option chain) and the interest rate (around the current T-bill yield). The calculator returns a call and put value with delta, gamma, theta and vega. Change one input at a time, such as the spot or the days left, to see how the premium reacts.
What is the LTP Calculator in AOC?
It answers a narrower, more practical question: if NIFTY reaches the price I expect, what will this option trade at, and where should my stop and target be? You tap a strike's LTP, type the target spot or future price, pick buy or sell, and get an entry, stop loss and target premium. It uses the strike's live delta, gamma and theta, and sizes the stop and target from that strike's support to resistance width.
How accurate are option calculators?
For liquid at-the-money options and small moves, close. They get worse for big moves, when IV changes (for example after results), and on expiry day, when gamma and theta change by the minute. Use them for planning limit orders, not as a promise of price.
