Introduction

Find the best option fast and easy!
Goals of optionrating.com
Intended for investors, investment consultants and issuers
What is an option?
What will investors find at optionrating.com?
How should an investor use optionrating.com specifically?
Which data can be requested?
Investment horizon and risk profile as the basis of the ratings
How does the rating work
Rating results: Seal of quality and stars
Key customer benefits of optionrating.com
About optionrating.com
Disclaimer

Find the best option fast and easy!

Optionrating.com allows you to keep track of the huge range of available options and to optimally turn your own market expectations into reality.

Compare the countless options on the basis of an underlying security, simulate varying market responses and see at a glance which option is best suited to optimally realize your scenario.

Optionrating.com also shows you immediately which option generates the largest profit or which has depreciated the least.

Goals of optionrating.com

The optionrating.com ratings provide investors and investment consultants with information about the respective suitability of an option with regard to the investors? specific requirements such as investment horizon and risk category.

The ratings aid the selection process and help improve market transparency in general. In addition, the issuer receives an independent assessment of the quality of his option.

The aims of optionrating.com are:

To increase market transparency.
To improve the comparability of options.
To provide investor protection on the capital markets.
To narrow down the vast array of available products according to investor requirements.
Independence and objectivity.

The ratings provided by optionrating.com are based on current market data published by the stock markets without any contractual commitment on the part of the issuers. This guarantees complete impartiality and the inclusion of all issuers listed on the stock markets. The ratings on optionraating.com are recalculated and updated on a daily basis.

Intended for investors, investment consultants and issuers

The offer is aimed at both private and institutional investors. The ratings of optionrating.com enable them to quickly and simply find their bearings in the growing options market. In doing so, optionrating.com helps the investor to find the option that best fits his market expectations.

The offer is also aimed at investment consultants, for whom the ratings represent an independent seal of quality that enables them to offer customized, high-quality advice.

And finally, our offer is also aimed at issuers who can use the ratings as an independent assessment of the quality of their options.

What is an option?

An option or warrant is a financial derivative. An option entitles the holder to buy or sell a security at a later point in time (upon maturity) and at a price agreed in advance (strike).

It is also possible to let an option slide, as the buyer acquires the right, but is not under any obligation to sell (call option) / buy (put option) a certain quantity of an asset (underlying security) at a price determined in advance (strike price) at the end of the exercise period.

The seller (also referred to as the taker, issuer or subscriber) receives the purchase price of the option. If the option is exercised, he is under obligation to buy (put) or sell (call) the underlying at the previously agreed price.

Options are ultimately high-risk stock market transactions as the leverage means that changes in the respective underlying security generally have a disproportionate knock-on effect. Options allow the investor to reproduce his market view or hedge existing positions using only minimal capital input.

What will investors find at optionrating.com?

On the www.optionrating.com homepage you will be greeted right away with a small selection from the ?Options of the day? area. These are the highest-rating options on the respective trading day and are updated daily.

Clicking on ?More options of the day? takes you to the full list of results and allows you to display a summary of the five highest-rating options for all available securities from all indexes.

Here we calculate a number of different variants for each security for the respective trading day:

Short-, mid- and long-run investment horizon and
conservative, moderate and risk-oriented risk profile

The results for the mid-run investment horizon and the moderate risk profile are freely accessible, while the others are reserved for registered users.

The ?Optionrater? area allows an up-to-date rating to be carried out during the course of the day. To do so, you must first select the security and specify your own scenario, after which you will receive a sorted list of all rated options. Those options that match your scenario best appear at the top of the list.

The ?Optionrater? area is only available to registered users.

How should an investor use optionrating.com specifically?

We can answer this question using a specific example: How do I use optionrating.com to find the best option, for example, for rising prices over the next two months for stock in Deutsche Post AG, a security listed on the German DAX index?

Optionrating.com provides a summary page for each security on the ?Options of the day? page which lists the five highest-rating options. To call up this page for Deutsche Post AG, proceed as follows:

Click on the ?Option of the day? button on the www.optionrating.com homepage. Next, select the DAX from this list of indexes on the left. Enter the ISIN or ticker for Deutsche Post AG (DPW) in the search field. Then click on the ?Show more options for DPW? link.

You will now see the five highest-rating options for Deutsche Post AG with a mid-run investment horizon (approx. 3 months), with the best option appearing at the top of the list. You now have the option to narrow down the selection even further by changing the investment horizon or risk category. It is also possible to display puts rather than calls, if you wish to adopt a bear strategy.

If the investor wishes to specify his scenario in greater detail or requires further information on the individual options, he can switch to the ?Optionrater? area where he can again select the DAX and Deutsche Post AG. Here it possible to specify the anticipated price development and the minimum maturity in far greater detail. The investor receives a rating in which those options that are most suited to his scenario are listed at the top.

Which data can be requested?

At optionrating.com it is possible to request data on all CHF and EUR warrants traded on the Frankfurt and Zurich stock exchanges.

If you are interested in other stock exchanges, please do not hesitate to notify us. To do so, please use our feedback form.

Investment horizon and risk profile as the basis of the ratings

In order to provide the best possible range of products, the ratings are simultaneously calculated for a variety of different investment horizons and risk profiles.

The investment horizon is the period of time during which an investment is held. This is especially important since options have varying maturities. Investors can choose between the following investment horizons:

Short-run: Up to three weeks.
Mid-run: One to five months.
Long-run: Six months to a year.

If you are uncertain, we recommend that you use the mid-run investment horizon.

Using the risk profile, it is possible to define a weighting for rating in respect of hedging against losses or high prospective earnings. Optionrating.com examines the options available on the stock market with regards to their suitability for the different risk profiles. Investors can choose between the following risk profiles:

Conservative: Protection against losses is more important than high prospective earnings.
Moderate: The investor attaches value to prospective earnings while ensuring that potential losses or risks remain manageable.
Risk-oriented: High prospective earnings are extremely important and to achieve these the investor is also willing to accept considerable risks.

If you are uncertain, we recommend that you use the moderate risk profile. With the Risk-Wizard we also offer a tool using which you can determine your own risk profile on the basis of just a few questions.

How does the rating work

During an initial step, your investment horizon is used to calculate the price rating, not only for the price development in the anticipated direction but also in the event that the price of the underlying remains unchanged or veers in the opposite direction. Next, the fundamental rating, which comprises current market data such as spread, volume or volatility, is determined for each option. Taking your risk profile into consideration, the fundamental rating and the price rating are added to give your overall rating, which is recalculated and updated daily.

The price rating illustrates how the option has performed in the three option price simulations in comparison to the other options.

The fundamental rating provides information on how the option has performed with regards to spread, volume and iVola, etc, in comparison to other options and is comprised of the following options:

Spread: The margin between bid and asked prices; low spread = higher rating
Vega: Option rises in the event of a 1% rise in volatility; low Vega = higher rating
Theta: Delay of the option; low Theta = higher rating
iVola: Anticipated latitude of price fluctuation of the underlying security; low iVola = higher rating
Volume: Average volume of the past 4 weeks; higher volume = higher rating

In the case of both volume and spread, the ratio of the option is factored in when calculating the rating.

Rating results: Seal of quality and stars

The seal of quality is the highest distinction and is awarded to options that are the best in their category. The number of stars an options is awarded (zero to five stars) indicates the suitability of an option for the defined investment horizon and risk category.

Key customer benefits of optionrating.com

Our ratings illustrate the strengths and weaknesses of the option with an unparalleled degree of transparency. This additional security when selecting an option reduces the inhibition threshold when it comes to buying options.

The rating demonstrates in detail how much can be earned with each option or, if you invested in the wrong strategy, how much you might lose. This transparent list of future option values is an important contribution to selecting the right option.

The risk category factored in when selecting the option. At optionrating.com, a tool, the Risk-Wizard, was specifically integrated for this purpose. With the aid of this wizard, it is possible to determine the risk category on the basis of a few personal questions. This helps to establish whether or not the investor is absolutely sure about what he is doing and is willing to take on large risks or whether he would be better advised to choose an option that keeps both loss and risk to a minimum.

About optionrating.com

Optionrating.com is operated by Fabware GmbH, an independent software company specializing in commercial software products for the financial industry as well as for client-specific software solutions. The company is fully owned by the employees.

The majority of the workforce boasts a university degree in economics and computer science from the University of Zurich. In the recent past, this has made Fabware an ideal partner for IT projects in the financial sector and ultimately led to the development of optionrating.com.

Disclaimer

The information published on the website if optionrating.com does not constitute a solicitation or offer, or recommendation to buy or sell any securities or to conclude any other kinds of transactions. The information merely serves to aid clients with possible decisions. The customer is explicitly urged to make all decisions independently. We shall not accept any liability for losses or lost profits that may arise as a result of the client using the information.