|The Option Model for the New Millennium.|
|OPTION SERVICES for COMMODITIES, CORPORATION:|
Accuracy of OSCC Option Trading Tool Programs:
The following paragraphs refer to the OSCCFV real times quotes which are temporarily suspended. The OSCC relative Normalized Total Dollar Option Premium is derived from the same program and carries the same accuracy. We left this page in to try to show users what kind of accuracy we do have. We apologize that samples of our quote pages are no longer available. The results are available on our option charts.
Since all the products of OSCC are based on the same basic system of formulas, it is our opinion that they all have about the same accuracy. No guarantee is made or implied that you will be able to get the same accuracy with your trades. Your broker's prices may be over, under or at our indicated value or premium. Every trader has to determine where the pricing of their broker falls with respect to our products. Every trader must test our figures before using them in actual trading.
The accuracy of the OSCC Quotes are measured as the number of trades that our predicted value exactly matches the next trade or falls within a specified difference from the next trade as a percentage of the total number of counted trades. Counted trades equals captured trades less the uncounted trades as described below. We put a list of the "Accuracy=%" statistics figure on the OSCC Quote page for each contract and a summary for the day on the Today's Over & Under page that show the accuracy of the OSCC Quotes. Generally you will find these figures to be between 60-90% The near term contracts are usually higher and the far term contracts lower. On occasion events do happen on the trading floor such that the program accuracy can drop to below 30%.An accuracy distribution curve can be viewed at the Distribution Curve.
When the OSCC Quote exactly predicts the traded price with a "Direct Hit" we designate the difference as OSCC Diff = 0 and show the number of these hits. We then list the percentage of trades at this difference as the "Floor trader at 0 Tick =%. We assume this is a trade made amongst the floor traders or a trader got the floor value. Since floor traders are scalping between both the buying and selling sides it only stands to reason this percentage will be small.
The "Good Fill +/- 1 Tick =%" figure on the Today's Over & Under List represents the percentage of all counted trades that occur at OSCC Diff =+/-1 ticks from the OSCC Quote. This is extremely good trading.
The "Bid-Ask +/- 2 Tick" figure on the Today's Over & Under List represents the percentage of all counted trades that occur at OSCC Diff =+/-2 ticks from the OSCC Quote, i.e. the "BID-ASK." Brokers have said that some quotes are given as a two point spread. Thus virtually all trades should occur within this spread. Statistically this is true, but only about 20% of all trades actually are in the +/- 2 range itself. Most traders do better.
As the worldwide markets assess risk, some trades understandably do occur outside these spreads.. We use the trades that are 2-3 ticks outside the OSCC Quote to constantly adjust whichever strike price is changing its risk position. Since this represents participation of a trader in world wide risk assessment, a trade in this range is accurate in that sense. The overall percentage is shown as the "Risk Adjust +/- 3 Ticks=%" figure. This represents the sum of the above categories plus those that are 3 ticks outside the OSCCFV as a percentage of all counted trades. Ticks 4,5 and 6 ticks outside the OSCC Quote will be stepped in for large moves in the futures.
The remaining percentage is made up of the following:
Trades from 4-11 ticks outside the OSCC Quote are also counted. They account for about 1-5% of counted trades. We are going to assume these are not single item transactions, i.e. they are spreads, butterflies etc. Trades from 12-63 ticks outside the OSCC Quote are counted and we put them into a separate category. They are less than 1 % of all trades.
Trades not counted.
Captured trades are all the trades that are sent to us
by our data vendor less the uncounted trades described
below. There are several reasons for this. Some are due
to the options themselves and some are due to the futures. These are the trades that are not used in our
We also have a new
"chart explanation page" to help explain
what these charts show and how to use them.
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Last Updated on 06/01/2010
By Tom B
As used throughout this web site: 06/01/2010
This site relates to option trading of commodity options and futures with strategies that buy or sell
puts and calls either long or short for profit on treasury bonds and notes, Dow Jones Index, soybean products, corn, wheat, oats, rough rice and T-Bond
options on the CBT, Chicago Board of Trade through "floor
traders". We are also doing 6 currencies from the CME, the Chicago
Mercantile Exchange, the Japanese Yen, British
Pound, Swiss Franc, the Euro FX (ECU) and the Australian and Canadian dollars.
We also do 5 agriculture products, the S&P 500, NASDAQ 100 and Eurodollars
related to European and Economic Monetary Union (EMU) interest rates. Commodities are a high risk speculative hedging investment
and traders should use brokers for trading contracts who keep
their funds and money in accounts with high rates. This site provides free commentary, and technical analysis on commodity futures
and option premiums by OSCC from our futures charts and option charts for
use by traders.
This site no longer provides free quotes, although we do provide a free commodity ticker.
Copyright 1999-2007 by OPTION SERVICES for COMMODITIES, CORPORATION