OptionStrat, an online options analysis software platform for retail traders, is expanding the depth and breadth of its product offering.
As part of the effort, Benzinga spoke with OptionStrat founder Heath Milligan.
About: Given the commission-free trading revolution and fintech disruptions, more people have access to financial markets.
The implications of increased access are apparent: during the pandemic, retail trading activity rose to new records as participants sought engagement with the outside world.
Moreover, in finding an edge in products that allow participants efficient exposure to market volatility, resources for education and analysis have become popularized.
Founded in 2020, OptionStrat is a fintech specializing in options education and insights. The firm was founded to make it easier to gain an understanding of how options work.
To preface, options provide participants with the right to buy or sell an underlying asset at a certain price and date. As traders search for yield and move beyond passive index-fund investing, options have captured participants’ attention, Milligan said.
“Options can be difficult to fully understand, however, and with many people being visual learners, I realized there should be an easier way to teach them,” he said of using his talents in software engineering and markets to develop visually pleasing tools to learn. “That’s where the idea for OptionStrat was born, to create a modern and intuitive tool for options education.”
The Core Product: OptionStrat’s flagship product is an options strategy builder.
“It lets you build custom strategies piece by piece or select from 50 pre-made strategies,” he said. “It will show you various stats about your strategy — like the maximum profit and loss — the chance of profit, and a chart or table that shows your potential earnings at various dates and prices.”
Graphic: Analyze strategies with OptionStrat’s free strategy builder. The expiration, implied volatility, among other metrics, can be manipulated, with calculations updated in real-time.
Another important offer is an options optimizer that searches through millions of potential trades to find the optimal strategies.
“It can be tailored to your risk tolerance, suggesting trades that are more conservative or aggressive depending on the trader,” Milligan said.
The last important feature is OptionStrat’s unusual options activity tools that allow traders to follow the smart money, so to speak. In comparison to its competitors, the firm allows users to uncover activity in complex strategies.
“Whether someone is trading a million dollars worth of regular calls or puts or a multi-leg strategy, OptionStrat can put the pieces back together to show traders the full picture.”
OptionStrat's Sole Focus: The growth and innovation of OptionStrat come as trends suggest investors more so trust themselves and their embedded networks like TikTok, Reddit and Twitter.
“There are tons of new traders coming into this world,” Milligan said.
“As we see more people join Reddit and stuff and talk about options there, they can share links to strategies to sort of show the people what they’re potentially doing and get feedback.”
To put it simply, OptionStrat caters to different levels of traders.
Individuals just getting into options can use the firm’s optimizer and flow analysis to find or develop ideas.
On the other hand, if more advanced, users can look to the strategy builder to discover what options structures enable them to take full advantage of market dislocations.
OptionStrat Going Forward: Though an early stage company, Milligan said OptionStrat is positioned to grow given its focus on adding more tools and information.
“We recently added historical data, paper trading and real-time news to the platform,” he said of the platform being accessible on desktop and mobile.
“In the future, we plan on creating additional ways to educate traders about options in a visual, intuitive way.”
Though mostly free, for $15 per month, users can get access to live data as well as a premium strategy builder and optimizer. For an additional $35, users can get all of the aforementioned, in addition to options flow.
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