User Guide

Utilizing the Crypto Options Calculator is straightforward and user-friendly. Follow these steps to price your cryptocurrency options:

  • Select a cryptocurrency: Choose the desired cryptocurrency for which you want to price options from the list of top coins.

  • Select Time Interval: Choose the preferred time interval for historical volatility calculations. The time interval represents the length of the candle used to perform the historical volatility calculations. For instance, "5M" corresponds to a five-minute interval used in volatility calculations.

  • Select Lookback Interval: Choose the desired lookback interval for historical volatility calculation. This value determines the number of days in the past over which historical volatility is computed. For example, selecting 60 days will calculate historical volatility using your chosen time interval over the past 60 days.

  • Choose your Volatility Model: Select the preferred method for calculating volatility, either using the standard deviation or the Yang-Zhang estimator.

    • Standard Deviation: This method calculates historical volatility by measuring the dispersion of close-to-close price returns around the mean. It is a widely used and straightforward method, but it may not fully capture price jumps or rapid market movements.

    • Yang-Zhang: This method is a more advanced estimator that accounts for both overnight and intraday price movements, leading to a more accurate representation of the market's volatility. It is particularly useful for capturing price jumps and rapid market movements that standard deviation might miss.

  • Confirm Historical Volatility: The calculator will display the computed historical volatility, but you can also input your own value if desired.

  • Confirm Interest Rates: The calculator retrieves the live 1-year interest rates from Nasdaq API. You can choose to use these rates or input your own.

  • Enter Days until Maturity: Input the number of days remaining until the options you want to price reach maturity.

  • Enter Strike Range: Input the range of strike prices you want to see options priced for. The calculator will display the option prices for 10 sequential strikes within the range you have selected. If you do not input a range, the calculator will select a range on your behalf.

  • Press Calculate: Click the "Calculate" button to generate the option table.

  • Review and analyze: The calculator will display the option prices for both calls and puts along the input strike range, as well as other relevant information such as delta, gamma, theta, vega, and rho. Use this data to make informed decisions about your trading strategy.

Reading the Graph

The interface displays a a graph of the spot price of the selected token displayed in a green line. The scale of spot price is shown on the left Y-Axis.

The orange line graphs the Historical volatility of the trailing 10 periods of the interval the user has selected. The scale of historical volatility is shown on the right Y-Axis.

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