I'm progressing, all too slowly, on a site that aims to show real-time numbers for options that are listed on the CBOE. Most of the instantaneous numbers are all set. Now I'm going to pay attention to some of the trends in those numbers: option price, volume, put-call ratio, open interest, and similar.

One of the sets of values I want to show for each option is MACD of price (others, too, but my question is about price).

I wonder how I should calculate the EMAs that contribute to the MACD for option price:

Is it more useful, appropriate, and usual to calculate EMA based on the price of the underlying? Or on the price of the option itself?

If the question betrays my naïvté, well, so much the better: I welcome comments that tell me how I'm wrong wrong wrong!

Thanks so much!

The site is http://www.sellmycalls.com/cgi-bin/chain

I'm progressing, all too slowly, on a site that aims to show real-time numbers for options that are listed on the CBOE. Most of the instantaneous numbers are all set. Now I'm going to pay attention to some of the trends in those numbers: option price, volume, put-call ratio, open interest, and similar.

One of the sets of values I want to show for each option is MACD of price (others, too, but my question is about price).

EDIT: @Tal Fishman -- I want to show MACD because I understand that convergence/divergence of fast and slow EMA is helpful to a guy trying to decide whether or not to buy/sell an option. Am I quite wrong? SHould I abandon MACD and show something else? If so, what is that something else?

I wonder how I should calculate the EMAs that contribute to the MACD for option price:

Is it more useful, appropriate, and usual to calculate EMA based on the price of the underlying? Or on the price of the option itself?

If the question betrays my naïvté, well, so much the better: I welcome comments that tell me how I'm wrong wrong wrong!

Thanks so much!

The site is http://www.sellmycalls.com/cgi-bin/chain