Morningstar (Nasdaq: MORN), a leading provider of independent investment research, has begun offering equity option data, education, analysis, and a family of proprietary option volatility indexes on its investment Web site for individual investors, Morningstar.com.
Morningstar.com now provides full option pricing data throughout the trading day for every company on which options are traded. Investors can enter a ticker on the Options home page and customize the display of data, including historical statistical volatility and key derived option measures like implied volatility and option "Greeks," which are measurements of the sensitivity of option price changes to stock prices and other factors. Investors can also access option chains on any single company by entering the company ticker in the quote box that appears at the top of every page on the site.
Morningstar's option data is supported by educational content and option investment ideas to help individual investors understand the benefits and tradeoffs of investing through options. Morningstar.com will feature regular articles and videos on options, a glossary of key terms, a discussion board for investors to exchange ideas on options and derivatives, and the Morningstar Option Strategy Map, a framework which aligns option investment strategies with Morningstar's Equity Research.
Underpinning Morningstar's option investing recommendations is the proprietary and rigorous stock research of more than 100 Morningstar analysts covering 2,000 stocks across 130 industries. "By leveraging Morningstar's strong skill set in assessing both the value and the risk of common stocks, we can provide practical insights into the value of the options traded on those stocks," says Philip Guziec, Morningstar's derivatives strategist responsible for the options research effort.
Morningstar has also launched its own family of volatility indexes that provides a unique reference point for evaluating the options on individual stocks. The Morningstar Volatility Index (MVI) is unique in that it is an aggregate of the implied volatility of individual options within an index, rather than the volatility of the index itself. Investors can compare the implied volatility of an individual option against the index to determine if the option is cheap, average, or expensive relative to options on similar companies.
"Our focus is on using options to invest, not to trade," says Guziec. "We want to present this complex material in an accessible way to help investors use options to manage the risk and returns of their investment portfolios."
Options data is provided to Morningstar by Chicago-based ACTIV Financial Systems, a leading supplier of equity options and other market data services. "U.S. options data is one of the most challenging data sets in the world because of its volume, which will soon exceed one million updates per second," says Frank Piasecki, President of ACTIV Financial. "We are pleased to add Morningstar to the growing number of financial publishers, brokers and investors who depend on ACTIV content and data quality."