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Learn from Typical Users
P.O.P.'s users fall into four general categories.
  • Day Traders
  • Position Managers
  • Brokerage Desks
  • Banks and Clearing Houses

    Position Managers
    Position traders typically use P.O.P. to analyze the options volatility market and to profile potential trades. Generally, they will:

  • Imply volatilities and skews from market prices that are downloaded at no cost from the Internet.
  • Use interactive graphs to identify the risk of a trade with respect to changes in time and volatility.
  • Analyze options on-screen and see the option values change along with movement in the price of the underlying.

    Brokerage Desks
    Without a doubt, P.O.P. adds value to any options brokerage business. When managing a desk that trades options, it is mandatory these days to have an options analysis system. There is no other way to provide volatility information to clients. Desk brokers need correct option deltas without hassle or complicated setups. With P.O.P. you just enter the current futures price, strike price, and option price (premium), and P.O.P. instantly displays the delta, theta, vega, and gamma. Analyzing spreads such as straddles, strangles, and ratios is just as easy.

  • Day Traders
    A day trading version of P.O.P. provides all the tools necessary to trade options in a real-time environment. Ease-of-use, speed, and error-checking features are all especially critical. What follows is how P.O.P. is used by a floor trader in a typical day, and is just one of many different scenarios.

  • Run a start-of-day position using futures quotes from the overnight market.
  • Print a set of "delta sheets". These pages have options prices, deltas, etc. for each option at regular intervals in the underlying.
  • Enter trades into P.O.P. as they are made and print an updated risk analysis.
  • Download end-of-day prices from the Internet and imply skew curves from those settlement prices.
  • Print a mark-to-market profit/loss report that breaks your position performance down by strike and contract month.
  • Use the interactive graphs and curve-smoothing tools to manually adjust the skew.
  • Print an end-of-day market summary for study overnight.

    Banks and Clearing Houses
    For large firms, P.O.P. can analyze and combine many different options portfolios for a summary of global risk. In addition, because P.O.P. runs on a network, traders at many different exchanges can be managed from a central location. Most importantly, absolute risk reports allow the financial guarantors of a position to be aware of worst-case scenarios. It is for these reasons primarily that PMpublishing's consulting services have gained such popularity.

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