| As most keen
'surfers' will be aware, the web has oodles of
free software packages available for download,
for those prepared to take time to hunt them out.
Option software is a good example of how this
works. Programs also crop up as shareware, or
in the form of time-limited trial versions of
commercial programs. And some academics also post
free products on the web for use by the private
investor.
How do you find them? Try typing "option
pricing" into a search engine like AltaVista
or one of the specialist software search engines
like Download.com or Winsite.
The variety available shows the interest that
options stir up, especially in the US. It's not
too much of a problem getting these to work with
UK data. Options terminology is universal. Many
packages calculate option prices, volatilities,
and the 'greeks' (option sensitivities), based on
data input at the time. They don't require a
continuous datafeed.
Free option software products include a
spreadsheet add-in called !Options available from
Ray Steele's web site at Michigan State
University (http://pilot.msu.edu/user.steelera
). This supplements basic Excel functions and so
can be used to value options contained in, say,
the spreadsheet you might use to monitor your
investments.
The Options Direct web site
(www.options-direct.co.uk) contains a spreadsheet
to calculate the returns on 'covered writes.'
NumaWeb, a specialist derivatives site (http://www.numa.com
), has a variety of free option pricing
calculators, including some for convertibles.
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Lastly, Nigel Webb
Software (http://www.warp9.org/nwsoft/
) offers a free beta version of Optimum, an
option pricer which also provides 3D
representation of option sensitivities in a
wireframe format often only found on much more
expensive packages. Biography
Peter Temple is a freelance financial
journalist and author, who also spent 18 years in
the City as an analyst and fund manager. His work
appears in the Financial Times, Mail on
Sunday, Investors Chronicle, Investors
Stockmarket Weekly, Analyst, and a number of
other publications.
He has written a number of books, including 'Getting
Started in Shares' (JohnWiley 1996) and 'The
Online Investor' (John Wiley 1997). A second
edition of his book 'Traded Options - A
Private Investors Guide' is to be published
in mid-1998 by BT Batsford. He is currently
working on a book on Management Buyouts and
Venture Capital - to be published in early 1999.
Peter Temple lives in Woodford Green with his
wife Lynn, an actress, singer and music teacher.
They have two grown-up children, both musicians.
His interests include dabbling in the market,
swimming, travel, and crosswords, as well as
managing the finances of a fringe theatre
company.
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