REGARDLESS OF WHETHER ANY REMEDY SET FORTH HEREIN FAILS OF ITS ESSENTIAL PURPOSE, IN NO EVENT WILL GOLDEN SOFTWARE OR THE AUTHOR BE LIABLE TO YOU FOR ANY SPECIAL CONSEQUENTIAL, INDIRECT OR SIMILAR DAMAGES, INCLUDING ANY LOST PROFITS OR LOST DATA ARISING OUT OF THE USE OR INABILITY TO USE THE SOFTWARE OR ANY DATA SUPPLIED THEREWITH EVEN IF GOLDEN SOFTWARE OR THE AUTHOR OR ANYONE ELSE HAS BEEN ADVISED OF THE POSSIBILITY OR SUCH DAMAGES OR FOR ANY CLAIM BY ANY OTHER PARTY.
SOME STATES DO NOT ALLOW THE LIMITATION OR EXCLUSION OF LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES FOR THE ABOVE LIMITATION OR EXCLUSION MAY NOT APPLY TO YOU
IN NO CASE SHALL GOLDEN SOFTWARE OR THE AUTHOR'S LIABILITY EXCEED THE PURCHASE PRICE FOR THE SOFTWARE.
What to expect. Upon selection of the MacOptions program, the About dialog will be displayed. After, removing the dialog by clicking the button, there will be 5 menus displayed, File, Edit, Models, Volatility and Help. To start select the menu item of interest. Below is a brief description of each menu.
There are 5 main menus associated withe the MacOptions program File, Edit, Models, Volatility and Help. Note, the help function contains information and limitations concerning specific menu items and entry fields. Help should be consulted to ensure correct computations and understand limitations.
File and Edit are typical Macintosh menus. For more information on specific menu items see the help function.
Under the Models menu are two items Binomial and Black-Scholes. Both compute option information but differ in the algorithms used. The Binomial Algorithm is an iterative algorithm and therefore time consuming, but it allows the computation of American options, that is options that can be exercised at any time. As an added feature, European options may be also computed using the Binomial algorithm. The Black-Scholes algorithm can be used to compute European type options. On these Dialog boxes, the Tab key may be used to advance to the next edit field. For more information on specific entries and results use the help function.
The Volatility menu allow the estimation of option volatility. Two volatility methods are supported. Historical and Implied Volatility.
Historical Entry is a simple spreadsheet that allows entry of the underlying security's historical data for computation of volatility. Data can be imported from other spreadsheets if the spreadsheet is saved as text file.or any text file that has tabs between the data fields. Also data can be entered manually and be manipulated by the commands under the Edit menu. Upon completion of data entry, close to close and high - low historical volatility will be computed and displayed upon selection of the Summary command under the Volatility menu. Historical data is assumed to be daily data. On this spreadsheet the Tab key may used to advance to the next cell and the Return key to advance to the next line. Warning, it is a good practice to close the Historical Entry spreadsheet after the volatility is computed because of memory constraints. If a large spreadsheet is kept open, greater than 5 to 6 years of data, a memory system error may occur and cause unpredictable results.
The Implied volatility dialog allows the computation if the options implied volatility. The actual options prices are inserted for different strike prices and option expirations. Either American or European option volatilities may be computed. Because of length of time required to compute American values it is not recommended for slower computers. The implied volatilities are then averaged using a Kappa weighting scheme for European options and a simple average for American options. Note, for Future options only one month can be computed at a time because only one future price can be entered on this dialog. For American options 50 iterations are used in the binomial algorithm. Warning, because of limitation of size for the implied volatility put/call display boxes, upon returning to the implied volatility page, the complete values for the puts and calls may not be shown.
The Summary Dialog displays all available volatility estimates. By selecting the Use radio button, the selected volatility will be transferred to the Binomial and Black-Scholes entry dialog boxes for use as the volatility estimate for option computations. Selection of this command also initiates the computations of close to close and high - low historical volatility.
