- Our options strategy analysis tool uses simulation to evaluate multiple option strategies, including Covered Call, Bull Call Spread, and Bear Put Spread.
- The tool assumes that the underlying asset price follows Geometric Brownian Motion.
- Based on these simulations, the tool estimates the probabilities of the underlying price falling within ranges where the strategy is profitable, reaches its maximum profit, or incurs a loss.
- The Expected Profit/Loss is estimated based on the average price of the underlying asset in each range, derived from the simulation results.
- Our analysis tool performs thousands of simulations, but to prevent overcrowding, a maximum of 1% of the simulated price paths are plotted.