Tab once to the Stock offer input, leaving the number of shares to add input box blank ,enter the current quote of 32, then tab. Now, enter '3' in the 'Buy Contracts to Close' box.
Tab
over and enter the Call offer for the open Call contacts - 2.25. The next tab
will take you to the box indicating the number of Calls you would like to sell
to open - enter '3'. You will notice that the first Call bid entry is the same
option that you are considering buying to close. This of course doesn't make any
sense, so skip entry by tab through to the December 32.5 box, enter the
Call bid quote for January 30's and 32.5's. One more tab will highlight the 'Go
to the Evaluation View' command button. Before clicking this button or hitting
the enter key, let's review another feature of Covered Calls Plus that is
accessed through the Quote Entry View - AutoCalc.AutoCalc
What we've discussed and done so far in monitoring this position - entering all the relevant quotes, is the most accurate way to evaluate changing the position. Covered Calls Plus offers a second alternative that can save you some time, while offering insight into the option pricing model. This second choice is the AutoCalc feature which can calculate an open options' theoretical value. Using the current date, option strike, interest rates, and stock price, along with the implied volatility calculated when the position was originally established, AutoCalc will calculate the current hypothetical option price. This technique is most useful when considering adding to, reducing or closing an open position. In either of these cases, the only input required from you is the current Stock price, to get an approximate evaluation of the present situation.
The AutoCalc pricing technique assumes that today's implied volatility is the same as when the position was entered, which is not necessarily the case. Often times the option specialist will increase the volatility variable as the date of expiration is nearing, while a significant movement in the stock can also result in an increase in volatility.
None the less, the results generated by AutoCalc should be close enough to
give you an indication of whether or not the position should be changed at the
present time. When the results generated by AutoCalc give the impression that an
immediate change is warranted, always go back and enter all the actual
quotes and/or spreads in order to confirm that the approximate results were
indeed representative of the actual situation.Incidentally, all the calculations performed by AutoCalc when the appropriate quotes are left out will be performed whether or not AutoCalc has been activated. If AutoCalc is not activated, you will receive a warning each time a data input item is left blank, the program assuming that you may have accidentally left out a value. By activating the AutoCalc feature, all of the associated warnings will be bypassed, plus the backgrounds of all entry boxes requiring input will be changed to a much lighter color than the cells that can be skipped. The tabbing sequence will also be altered to skip the values not absolutely necessary, although you can use the cursor at any time to enter any of these values. AutoCalc can be toggled on or off using the AutoCalc command button or by choosing 'Tools/Activate AutoCalc'. The command button is only visible when the 'Add To' or 'Reduce or Close . . .'
features selected has been selected on the Initial View. To
the right is an illustration of how the Quote Entry View appears when using
AutoCalc in the rolling example just interrupted.
Tool
Tips is a Microsoft feature used throughout the program. Just let the
cursor hover momentarily over any text box, or command button that you wish to
know more about, a brief explanation will appear.