OptionStation Pro, an option analysis and trading software program by TradeStation, is sophisticated and well-documented software. Although it includes the usual precautionary advice connected with the complexities and risks involved with options trading, in the hands of an experienced trader all of the analytical features and chart routines should yield outstanding results.

A central core of OptionStation Pro is the Theoretical Position Panel, where trading positions (hypothetical at first) are analyzed. Theoretical spreads may be selected from a list of 14 types of spreads, including: butterfly, iron butterfly, condor, iron condor, straddle, strangle, calendar and diagonal. Automated calculations start with your selection of the asset to be analyzed using the OSI (Option Symbology Initiative) listing that comprises the underlying asset, expiration date, order type (put or call) and strike.

Following selection of the underlying asset, an Option Chains panel may be accessed by clicking the Option Chains tab, or by making the selection on the home menu. At the top of the Option Chains panel, the spread type is selected. Going down the panel are expirations and separate areas for calls and puts. Moving across the panel, in separate sections for calls and puts, are columns for bid, ask, Delta, Gamma, Theta and implied volatility.

The center column on the Option Chains panel between the put and call sections lists the strike prices related to the option chain. Visual access is made easier by the different shading for puts and calls. The option chain displayed automatically shifts the strike price column, call and put values to reflect the spread type selected. Reformatting the panel also is possible, replacing the columns shown above with selections such as intrinsic value, open interest, daily trading volume, percentage price change from the previous day and others. An additional column selection that would seem particularly useful is TV, the theoretical value determined by a pricing model that decides whether an option is underpriced or overpriced.

When a spread type is selected on the Option Chains panel, the relevant strikes appear in the center column, while bid and ask prices for the calls (on the left side of the panel) and puts (on the right side) show option prices for each strike. An example is the selection of a butterfly spread, which causes three butterfly strikes to be listed in the center column.

For the spread that is selected, the Option Chains panel presents the total premium (bid, ask, or mid prices) along with composite Greeks and volatility values. A theoretical position for analysis is entered by clicking on Bid (for a short position) or Ask (for a long position).

At this point, the action shifts to the Theoretical Position panel, and if you are captivated by charts, this is the place to become a willing victim. OptionStation Pro contains a selection of 2D and 3D charts that are amazing in their ability to show multiple facets of a trade on a single screen. For example, the 2D screen is divided into three sections: A risk graph, probability cone and price points.

The risk graph shows profit and loss (Value P&L), or Greeks (Delta, Gamma, Theta, Rho and Vega). With the underlying asset price scaled along the X-axis, the Y-axis can show profit and loss or a different selected aspect of the spread. The P&L line plotted is based on asset price, time to expiration and implied volatility. The trader can select from four different plots representing various dates between now and the day of expiration.

The probability cone is shown as a curve immediately below the risk graph. It presents the odds of the underlying asset price ranging outside of given parameters in a specified period of time. The probability curve is computed based on the stock price volatility and the number of days to expiration.

Section 3 of the Risk Graph is an area in which different price points can be defined for real-time analyzing and monitoring. By entering various percentage changes in the underlying asset price, you can see profit and loss variations as well as the behavior of the Greeks under different price conditions.

Graph features include zoom, undo zoom, maximizing the 2D graph to full screen mode and exporting a copy of the 2D graph in a number of formats.

The probability cone has a feature called Show Cross Points. Two horizontal lines on the probability cone mark the expiration dates, and two vertical lines show where each expiration line crosses the probability curve and the vertical lines intersect the risk graph. The space between the vertical lines narrows as the number of days to expiration decreases.

The 3D graph introduces the visual dimension of time, so that the view now includes stock price, P&L and time. Future dates are shown receding into the distance as a perspective view. The 3D graph commands include Animate, for a continuously changing animation of different view, and Maximize, to resize the 3D graph to full screen mode.

In addition to complex spreads, the Value P&L graph can show a typical call or put graph with the stock price changing along the X-axis relative to the strike price. Each of the Greeks has its separate graph with stock price shown along the X-axis and the value of the Greek measure on the Y-axis. In all of these charts, a vertical line at a selected stock shows the price point at the last traded stock price.

Obviously, with the number of choices available in terms of assets, spreads and graphics, some experience and training are needed to use OptionStation Pro. As indicated above, this program should be a valuable tool for any active option spread trader. With immediate access to analytical models and trades possible in either hypothetical or real modes, the software has tremendous potential.