How to Chart Volatility for Stock Options

Chart volatility for stock options using the Volatility Charts software available online with TradeKing. This stock options website features stock option analysis software in addition to broker access to stock option contracts. The charting features are free upon sign-up. The Volatility Charts let you graphically display discrepancies between a stock's historical volatility and implied volatility, which are the two key measures of volatility when analyzing stock options. Historical volatility is an analysis of a stock's prior price fluctuations. Implied volatility shows how option prices reflect what market participants expect of the stock's future volatility. These Volatility Charts are easy to access after entering the ticker symbol for the stock.
Create a 'SpreadHacker' chart using the ThinkOrSwim software platform. This software is free after registration and includes many analytical features for researching stock options. The SpreadHacker tool calculates implied volatility, and optionally combines this information with other stock option characteristics, such as strategy probability and real-time price analysis. You can then use this information to find a stock option trading position that suits your investment goals. Hundreds of different stock options trade on most stocks. SpreadHacker lets you categorize the options based on their implied volatility so you can study the possibilities more quickly.
Download the free Stock Volatility Calculator software for Excel. This spreadsheet application includes pre-written formulas to calculate a stock's historical and realized volatility, as well as statistical deviations of the stock's price movements. Unlike more comprehensive software, this program does not incorporate this information into a dedicated interface for stock option analysis. Thus, this program is best suited for veteran traders with a strong knowledge of option behavior. Experts can make informed decisions based solely on these raw calculations and will know how to use this program's data with other software to find good stock option strategies.

How to Calculate a 3

Understand that stock splits do not give greater ownership in a company. Stock splits simply give you more shares of a stock while the value per share declines proportionately. Stock splits do create some tax advantages when stock is sold. Consult an accountant for professional advice.
Calculate a 3-for-1 stock split by knowing the number of shares you own prior to the effective date of the split. A stock split is merely a ratio: 3-for-1 means you now own three shares for every share previously owned. If you owned 1000 shares pre-split, you would now own 3000 shares post-split. The market value of your investment remains the same, however.
Calculate the new, adjusted earnings per share, cash flow per share, and other per share calculations by multiplying the pre-split amounts by 1/3. Know that at the time of a split announcement companies usually make pre- and post- balance sheets available.
Do not confuse a 3-for-1 stock split for a 1-for-3 split. This is also referred to as a reverse stock split. In a reverse stock split the value per share rises 3-fold and the outstanding number of shares declines by 2/3s. This technique is used for companies whose share price has dropped below margin.
Use the above technique for any ratio of stock split. Remember that the assets, liabilities and net worth stay the same. Only proportionate, per share amounts, change.