Lets say I have a stock that is currently at $61 per share and I "buy a put" with a strike price of $42 that expires 6/19/20. How do I use this formula in the picture to figure out the best strike price?
 

10 months ago Absolute rubbish: Try this one: Option period/365, take sq root, multiply times stock price times implied volatility (available on most computer optic scans) and you have one standard deviation from the price or nearly 70% probability of movement to first pip or first strike price for option. If you half th number and add it to original in either direction, you arrive at 2 standard deviations which puts range at 90% probable. Somewhere in this range is the correct strike price based on option price probable movement, bid ask and a few other decision model But at least you now know what the probable range for setting a profitable strike price is.