OSCC Risk Ranking Column Heading Definitions

This list is our opinion only. Therefore no investment decision should be based on this table. Consult your broker before making decisions. We are not responsible for any losses based on these guidelines 

chart Explanation

This chart ranks the option we cover by how much risk we think there is to a trader using that product. The lowest number has the least risk and the highest number the most risk.  We sort our table first by category ranking and then by risk ranking. We feel this chart gives users of this website an overall view as to what we perceive the relative risk is in trading the various products. They can then choose their own risk level. We made a chart of these values for a visual comparison.

Definitions for the categories are listed on a separate page

Column Headings

Floor Trader Index
Premium Variance
Contract Range
Future Variance
Option Volume
Future Volume
Risk Totals
Risk Category

Floor Trader Index

To us this is the most important risk indicator. The value we started with is the OSCC Total Option Premium future adjusted. In theory this should be a constant number and not vary over time. We did a look back of 30 trading days and averaged that number over the last 300 trading days. That was divided by the current 10 trading day moving average. Then to get a relative value we divided all the products by the lowest value giving that option product a 1 and all the rest something higher. 
This risk factor is so important we gave it its own chart. 
To learn a little of the history and development of this index see footnote.

Premium Variance

The value we started with is the OSCC Total Option Premium. We did a look back of 30 trading days and averaged that number over the last 300 trading days. That was divided by the current 10 trading day moving average. Then to get a relative value we divided all the products by the lowest value giving that option product a 1 and all the rest something higher. 

Contract Range

The value we started with is the OSCC Daily Contract Range Value. We averaged that number over the last 300 trading days. Then to get a relative value we divided all the products by the lowest value giving that option product a 1 and all the rest something higher. 

Future Variance

The value we started with is the OSCC Today's Calculated Future Value. We did a look back of 30 trading days and averaged that number over the last 300 trading days. That was divided by the current 10 trading day moving average. Then to get a relative value we divided all the products by the lowest value giving that option product a 1 and all the rest something higher. To keep a relative this was further weighed by logarithmic process.

Option Volume

The value we started with is the Exchange option volume statistics for 2002. We determined the highest value (best liquidity). Then to get a relative value we divided all the products by the highest value giving that option product a 1 and all the rest something higher. To keep a relative this was further weighed by logarithmic process.

Future Volume

The value we started with is the Exchange future volume statistics for 2002. We determined the highest value (best liquidity). Then to get a relative value we divided all the products by the highest value giving that option product a 1 and all the rest something higher. To keep a relative this was further weighed by logarithmic process.

Risk Totals

We added up the above six relative risk values.

Risk Category

We assigned a Category to groups of products that we felt had the same relative Risk Total.

Return to top of Risk Ranking table.

Floor Trader Index Footnote

I am often asked why with all this information I do not trade. This is what I saw 14 years ago and is what made me close my account. Like 93.6% of all new traders I believed I could make money in options, because they had so little risk. How naive I was. Large 5 figures became small 4 figures. I took a time out and studied because I thought the problem was in not knowing what price to make my next trade at. Black-Scholes took to long to calculate and no software program was accurate. I "threw out" all the studies. Sat down and just looked at a newspaper with option prices on it for two weeks. Then realized how to price options. I just reached back30 years to my college studies in nuclear physics and theoretical calculus and put to gather the base of the program I use today. The pricing of options became instantaneous, highly accurate and easy to watch on the PCs of that day. But to my surprise something else showed up. I was able to "see" why I had lost money. I tested with real money what I saw and verified what  I saw. I used to day "Watch, they are getting ready to take out the public" and sure enough they did. I decide that most of what I saw would just get buried in the bank vault and I would try to help as many new traders as I could. The result is this website. This page is the last addition to this site. I may occasional make comments in my , but the work load is too much to expand it any further.

We also have a new "chart explanation page" to help explain what these charts show and how to use them.
For a better understanding of what we do please read these pages.
--- About Us What we found that prompted us to develop our option program.
--- The OSCC overview of option trading.
--- The OSCC Option Model.
--- Products
--- The Accuracy of the OSCC Option Model.

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