How to Make an Options Calculator with Microsoft Excel
- 1). Type or copy and paste the address http://www.exinfm.com/free_spreadsheets.html into your browser to visit a page of free Excel templates. Scroll down the page and find the zip file labeled Black Scholes Option Pricing. Click on the link to immediately begin the download.
- 2). Unzip the file using a standard Windows unzipping program such as WinRAR. To install this helpful add-in, move the file labeled options.xla to your Microsoft Office Library folder. Depending on your version of Office, this may look different, but it will more than likely be under the subheadings Program Files, Microsoft Office, your Office Version (for instance, 2007), and then a folder labeled Library.
- 3). Open Microsoft Excel by double-clicking on its icon and create a new spreadsheet. To create an options calculator, you must use the typical variables found in option pricing. Some examples of variables you can use are the number of days until expiration, hold values for stock price and the exercise strike price of your option contract.
- 4). Put these different variables wherever you'd like and label them with the terminology most familiar to you.
- 5). Use the same worksheet to build a cell formula in a different cell. This is where the Black Scholes Option Pricing add-in comes into play. This formula calculates the option price based on your particular parameters. To calculate the call option price, use a formula from the add-in such as in the BS_CALL formula.
