I'm guessing that the reason why anyone would be looking for free option trading software, is because they're planning on executing some complex option trading strategies and need a good profit and risk analysis tool to enable them to make more informed decisions.
Complex options positions would be things like strangles and straddles, iron condors, calendar spreads and diagonal spreads - in fact, any "spread" type strategy which involves a combination of options positions. The advantage of having some good free option trading software is, that by either inputting or downloading the relevant data, you can quickly analyze:
So we've done some research for you and below, you'll find a summary of some of the best free option trading software available. We should start by mentioning that if you're trading in the United States, there is one broker whose trading platform comes with dynamic risk graph analysis software, together with the ability to back-test strategies on historical data. This broker is ThinkorSwim by Ameritrade. They are, in my opinion, far ahead of the rest of the pack as far as options trading software goes. The bad news is, that they don't accept accounts from residents of a number of foreign countries anymore, including Australia and the UK.
The US stock market is the most liquid in the world and their brokerage rates are much cheaper than other countries. So if you're intending on trading US stock options from outside the USA using more complex strategies then you'll be needing some alternative free option trading software to help you.
These free tools will be very useful to any who have purchased and intend using the advanced strategies outlined in the very popular Trading Pro System - an options educational course that teaches you how to "manage your portfolio by the numbers" - meaning, "the greeks" - but can't get access to the ThinkorSwim platform that it recommends.
1. OptionEdge - http://www.oedge.com
This is an Excel based program (so you'll need that program or the Open Office version) which allows you to explore what-if scenarios and provides risk graphs and profitability profiles for your intended positions. You can also save and print your results.
Here's a link where you can view a screenshot of what this free option trading software package gives you.
2. Options Oracle - http://optionsoracle.software.informer.com
In contrast to the above, this is standalone software which also allows you to download options information in real time. It's an interactive tool which has a user friendly interface that will both analyze and graphically represent your positions. It also contains a "screener" Wizard which lets you locate and test pre-configured strategies over multiple stocks and options.
You can also compare historical and implied volatility for any options you're considering purchasing, for any given timeframe. Options Oracle also includes a "greeks" calculator, making it ideal for anyone outside the USA who uses the Options Trading Pro System.
It can also manage multiple portfolios and navigate between saved strategies.
3. Option Calculator by Trader Soft - http://www.trader-soft.com/software/free-option-calculator.html
This is a basic program which allows you to calculate the fair value of call and put options based on the Black-Scholes pricing model. You can calculate implied volatility, the greeks and see a profit/risk graph of your intended or open positions.
The basic version is free. If you want their advanced option calculator which includes a number of other features, then it will cost you $95.
4. Option Star - http://www.optionstar.com/intro/ezdl.html
This is another Excel based application which can analyze specific spread strategies such as covered calls and other custom spreads. Based on the data you input, the program will provide volatility information, the greeks and a highlighted estimate of whether the options are overpriced or not.
Option Star will also give you a risk analysis and profit graph of any positions you choose.
Based on the above summaries - and assuming you can't get access to the ThinkorSwim trading platform - my preference would be to test run Options Oracle. It seems to carry the most comprehensive and flexible basket of features.
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