Skip to content
All library documents

Calculating Option-Derived Levels from Strikes and Premiums

Article MQL5 code base
Read the original

Summary

This indicator calculates and displays option-derived levels on a trading chart from manually supplied strike prices and premiums. Its stated formulas add a scaled premium to the call strike and subtract a scaled premium from the put strike. Inputs also include call and put volume and open interest, a premium multiplier, and chart display settings for line appearance and labels.

The document recommends using the indicator as a trading aid and points to exchange bulletin data as a source for inputs. It provides sample parameter values but no rationale for choosing particular contracts, no interpretation of how the plotted levels should guide trades, and no empirical evidence that they predict support, resistance, or returns. The level calculation depends on correctly scaled premiums and current option data; the page does not discuss update frequency, contract selection, or risks of treating the lines as signals.

Key ideas

  • The indicator plots separate levels derived from call and put strikes and premiums.
  • Call levels add scaled premiums to strikes, while put levels subtract them.
  • Volume and open interest are configurable inputs, alongside display and scaling parameters.
  • The document provides no validation evidence or detailed trading rules for interpreting the levels.

Tags

OptionsTechnical indicatorsDerivatives pricing

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.