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OptionTrader and options trading in the Trader Workstation platform
- Andrey Rimsky
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#35
by Andrey Rimsky
The standalone OptionTrader allows you to filter order books and includes pricing and risk assessment tools, as well as fast entry of orders with all sorts of parameters.
This TWS component has features similar to other tools: viewing market data, tracking underlying price fluctuations, creating and modifying orders, checking executions, and assessing risk based on recent position changes - all from one window.
In the Global configuration menu, you can configure order presets, markup of columns with market data, hot keys, and add buttons.
Access to OptionTrader
In the Mosaic interface, click on the "New Window" button, go to the "Additional Trading Tools" section and select OptionTrader.
In advanced order mode, enter the "Trading Instruments" menu and in the "Options Center" section, select OptionTrader.
Window components
The usual layout of the window consists of sectors for tracking quotes, creating and managing orders, and for viewing option chains.
Quote panel
Live quotes give you the opportunity to follow the movement of the underlying price.
Choose for yourself which fields will be displayed. To add/remove a field, click on the wrench icon.
Click on the bookmark with a "+" sign to add a new page.
The field for entering the underlying contains a drop-down list with previously used characters.
The "T", "S" and "B" icons in the right corner of the quotes panel allow you to quickly (de)activate the display of the toolbar, statistics or buttons.
Statistics panel
Option price data contains information that can help you guess the mood in the markets: changes in volatility, trading volume, put/call ratios, and open interest.
The statistics panel is designed to view these indicators for each individual underlying.
Market scanners make it possible to use these indicators to find the strongest/weakest players in order to subsequently apply the obtained data in trading.
If the panel is not visible, activate the display of statistics in the menu Configuration|Settings.
Button bar
Gives quick access to trading operations through a customizable set of buttons.
Click on the wrench icon to add/edit this or that action.
You can activate "quick mode" to instantly place an order.
Buttons that are not available will be grayed out - for example, if you do not have any positions, the "Close position" button will be inactive.
Order control panel
This panel contains several tabs with the functions of entering/changing orders, viewing executions, checking the market value of positions with real-time updated P&L indicators of the underlying and its derivatives. Use a special tool to create spreads.
Option chains
The glass of option contracts is displayed at the bottom of the window - calls on the left, puts on the right, sorted from top to bottom according to the distance of expiration.
The Autoload function (Configuration|Settings) automatically loads a specified number of contracts closest to expiration and strikes closest to the at-the-money state. To set the desired number of options, click on the wrench icon and go to the "Settings" section.
Chains are delimited by expiration, and each of the lists can be opened / hidden using the arrow in the title bar.
Use the Strikes/Expirations/Exchange/Multiplier/Trade Class buttons to filter the results. As soon as you select the contract you are interested in and close the list, the option chains will be updated automatically.
Weekly options on about 200 US underlyings allow you to trade more targeted, taking into account indicators such as company earnings, government reports and Federal Reserve announcements. These options appear at the top of the table and can be loaded/hidden using the Expiration button.
Mini options are contracts 10 times smaller than standard options with a multiplier of 10 instead of 100. To load mini options, open the "Multiplier" list. Currently available for APPL, AMZN, GOOG, GLD and SPY.
To view LEAPS long-term contracts, add/remove the required markup fields. For example, you can add Greek columns to option chains.
The Load My Circuits button allows you to view your available option positions for the selected underlying.
Background colors
In the "Description" header menu, you can activate the color coding of contracts depending on whether they are in the money or out of the money.
Right-click the Description column heading and select Color options based on in-the-money status.
⦁ In-the-money options will have a pale green background.
⦁ Out of the money options will be marked in pale red.
To set platform-wide default settings, open the Global Configuration menu and go to the "Display" section.
OptionTrader Configuration
You can open several bookmarks for different contracts at once by selecting the + bookmark and specifying the name of the new underlying. Closing the OptionTrader window will remove all tabs. To keep your bookmarks configured in OptionTrader, instead of closing the window, COLUMN it.
Right-click on a column heading in any of the panels or click on the wrench icon to go to the Global Configuration and add other columns to your options chain, such as Greeks: delta, gamma, vega, theta, or implied volatility or other indicators .
Creating orders
In the option chains window, simply click:
Ask for a call or put to create a BUY order.
A call or put bid to create a SELL order.
Order control panel
Bookmark "Orders" - the line with the order appears in a separate segment below the quotes panel and is automatically filled with default values.
Manage/modify/transfer running orders in the orders tab.
Right-click to attach an automatic, trailing stop or bracket.
Attach a trailing stop to Smart Routed Limit Orders and enter an additional price (the trailing amount) as well as a limit stop price on the order line.
Option brackets must be sent to the BOX exchange. Add a Destination column and select BOX before placing the bracket order.
The Volatility Order Type is a unique TWS feature that allows you to trade volatility and calculate an option's limit price based on implied volatility. You enter the desired volatility and TWS calculates the limit price.
As soon as you activate volatility trading in TWS, the bid and ask will show volatility, not prices - there will be a percent sign opposite the values.
Log bookmark – records of actions performed in the OptionTrader with the specified underlying.
Trades tab – executed orders for the specified underlying. To check the strike price of each leg in the spread, click on the Multilevel sign to reveal the combo line.
Portfolio tab – displays current P&L positions for the held underlying and any of its derivatives.
The Combination tab allows you to quickly create a spread on the order control panel.
Click on the bid/ask price of the desired calls or puts from the option chain to add them to the combo table, or set the parameters for each leg manually using the drop-down menus.
On the right, as you add legs, the strategy graph will appear.
Click Add share to enable the leg to buy/sell shares of the underlying asset.
The Make Delta Neutral function will automatically add a hedging leg to buy/sell the underlying shares for the total amount of delta. You can use the delta calculated by the system or set your own.
You can Place an Order directly from the Combination Editor or Add to Quote Panel to create a quote line with an estimated spread price.
Credit and debit spreads are color-coded in the bid/ask fields, as well as to the left of the "Place" button.
The spread remains liquid as long as each of the legs is liquid. If there is no bid or ask in the line with the estimated spread price, then one or more legs have become unrealizable.
Check risk
Before placing an order, right-click on the order line and select Check Risk to see the possible impact on your portfolio risk. The P&L chart consists of a line representing your current profit or loss and a line of profit or loss if an unplaced order is executed.
For a more detailed analysis, launch the "What If" function of the Risk Navigator by clicking on the View Details button in the upper left corner.
Toolbar functions
To display the OptionTrader toolbar, click on the "T" icon located to the right above the quotes panel.
Show volatility
The "Show volatility" button allows you to see the volatility value in the option chain price fields. In the Configuration menu, you can also select "Show option prices in volatility." If this option is checked, all new OptionTrader pages will display prices as volatility.
When the volatility display is activated, hovering over the bid or ask of any option will pop up a tooltip containing the amount of the option premium and its implied volatility.
Options comment
Read the daily options commentary from the IB Brief to keep up to date with market developments. Daily comments are written by analysts based on data obtained from the TWS Market Scanner.
Option spreads
Clicking the Option Spreads button will open the Combination Selection window to create a strategic combination using one of our strategy templates. To create a spread/combination:
"Multiple" tab
Allows you to simultaneously create lines with quotes for options on the same underlying.
The fields on the left are for filtering, the Ctrl+Click combination allows you to select multiple values in one box.
"Strategy" tab
Select a strategy from the dropdown list. The required fields will be added to the working area of the window.
Depending on whether you sell or buy a combination, the final action with each leg will depend.
In the working area, only those options that are suitable for the specified strategy will be offered to choose from. Expand the drop-down lists to select the expiration date, right and strike for each leg.
If the "Query market data for legs" option is enabled, rows for each leg will be added to the quote panel in addition to the implied spread price.
Bookmark "Pair or in stages"
Allows you to create your own combination by manually specifying each spread component.
You can set leg parameters in the value table or simply drag and drop a contract from the options chain to the bottom of the window.
When you have added all the legs you want, click "OK" to check the effect and amount of each leg.
The implied price of the combination is calculated in real time based on the price movements of the individual legs. Based on the component prices, SmartRouting can route each leg separately to the market center that offers the best price, with Masters Trade taking the risk of a partial order execution. (Guaranteed).
After you have added a quote string for the spread, you can create an order:
By pressing Ask, you will buy a combination.
By clicking Bid, you will sell the combination.
TIP: Double-click in the "Description" box in the combo quotes row to open the leg breakdown window.
Option exercise
All expiration options that meet the clearing organization's automatic exercise criteria will be exercised unless you take any action yourself.
Open the Option Exercise window (Mosaic > Account, Advanced Order Management > Trades) to either exercise the option before expiration or give an instruction other than automatic processing by the clearing house. For example, you may instruct not to exercise an option that would otherwise be exercised automatically based on the rules of the clearing house.
Please note that this process is irreversible; once you give an order to exercise an option, you can no longer cancel it.
1. From the Trades menu, select Option exercise.
2. In the Option Exercise window, select the option you want to exercise from the "Current Option Long Positions" segment.
3. Click "Perform"/"Yield".
4. Check/change the number of options you are going to exercise/yield and click "OK".
5. After that, you will see a message asking you to confirm your intention to exercise / assign the selected option - as soon as you click "YES", the action will be irreversible.
The exercised option will appear in the "Unrealized Exercises" segment, where it will remain until settlement.
Note: Some options, including but not limited to options subjected to corporate events, may not be exercisable by this method, so you will need to manually file a support ticket.
Price/risk analysis
Option chain market data is processed by analytical tools integrated into the OptionTrader panel.
Risk Navigator
Find out the riskiness of your portfolio across multiple asset types or separately by position, underlying or industry using the SM Risk Navigator hosted by TWS.
The risk navigator allows you to quickly identify the risk to which your portfolio as a whole is exposed to its individual parts, with the ability to view several reports at the same time.
You can arbitrarily change the dates, prices, and volatility of your portfolio, its segment, or a specific underlying, and the Think & Trade Risk Navigator will show the results of your custom analysis along with the results of the current market conditions.
To perform a custom analysis, open the report and select Custom Scenario from the View menu.
The script editor is located on the right side of the new window. Specify the date, price and volatility at your discretion.
You can filter affected underlyings by selecting All, Any, a specific contract, or an arbitrary group of contracts (using Ctrl + Click).
You can change prices and volatility by specifying the change as a percentage (% Chg) or as an absolute value (Chg), or by entering a specific value (ExpV).
The results derived from your custom portfolio parameters will be displayed in the Custom Scenario table, next to a scenario built from real-time market data.
Options analytics
Check the risk of your options positions based on the values of the popular "Greeks" - delta, gamma, vega and theta.
Options risk (both calls and puts) can be calculated for all contracts on the active page.
The price chart shows how much the contract price can change depending on the change in the underlying price.
At the bottom of the window, check the boxes for the conditions that you want to display on the chart for assessing time risk and volatility.
Vol-down reduces the implied volatility by 15% relative to the original.
Vol-up increases the implied volatility by 15% relative to the original.
T-down shortens the period until expiration by one calendar day.
To zoom in, select the part of the graph that interests you with the mouse.
Model Navigator
Use current market data in addition to interest rates and dividend levels to calculate implied volatility and option model prices. Specify your expectations regarding price movement and recalculate option prices based on new data.
When patterns are added to the Option Chain columns, they are colored differently depending on their relationship to the current bid and ask prices.
In the Global configuration there is a special section "Volatility and analytics" where you can activate the function "Read saved options patterns at startup".
Intended margin and excess liquidity at expiration
Two new fields have been added to the TWS Account window under "Margin Requirements" and "Funds Available for Trading":
Margin after expiration at open (predicted) - allows you to check the margin status of expiring contracts.
Excess after expiration (predicted) - makes it possible to check the level of excess liquidity of expiring contracts.
The values in these fields appear shortly before expiration and are highlighted in red. The rest of the time it is "0". These forecast values take into account the expected value of the entire portfolio, including the expiring contract. To see the predicted margin and excess liquidity for an expiring contract specifically, double click on the row.
Options Rollover and Option Selling Instrument
Two options trading tools, Options Rollover and Options Selling, allow you to quickly set up a rollover or contract to sell a call or put against existing long/short stock positions.
In each tab, you will be prompted to set the selection criteria, after which you will need to click the Refresh button to create a list of suitable contracts. To edit a contract, click on the pencil icon.
Options rollover
To avoid delivery of expired options and options on futures, you must extend or close positions before the end of the last trading day before expiration.
Use the Option Rollover feature to quickly determine which contracts in your portfolio are expiring and trade them for similar options with a later expiration date.
The description field contains drop-down lists from which you can select transfer criteria.
Click Refresh to see a list of eligible contracts for which you can trade the expiring option.
The pencil icon next to the option names allows you to make changes to the selected contract.
Select an order type and, optionally, an offset in price, and then click Create Orders.
Calendar spreads are displayed in Order Management. Checking and placement.
Option selling tool
Sell calls against longs, puts against shorts, or combine them into collars with the Sell Options tool, which shows all your long/short positions.
Collar options have recently become available, so you can now sell calls and buy puts against long positions, or buy calls and sell puts against short positions. Simply check both boxes: Sell Covered Calls and Buy Protective Puts in the Description section. New columns will be added depending on your choice.
The Description section contains drop-down lists for quickly defining selection criteria.
Click Refresh to see a list of contracts that match your criteria.
TWS calculates how many contracts to create based on your current long/short stock positions and determines how to allocate them to advisor sub-accounts.
Creation of orders. Orders will be displayed on the "Trade" panel.
Checking and placement.
Building a volatility chart
You can see a graphical representation of the underlying volatility.
In the chart window, on the toolbar, click on the "Chart Options" icon and in the What to show list, select historical volatility, implied volatility, open interest, or option volume as the main or secondary data source.
Our OptionTrader trading tool will take options traders a step further.
This TWS component has features similar to other tools: viewing market data, tracking underlying price fluctuations, creating and modifying orders, checking executions, and assessing risk based on recent position changes - all from one window.
In the Global configuration menu, you can configure order presets, markup of columns with market data, hot keys, and add buttons.
Access to OptionTrader
In the Mosaic interface, click on the "New Window" button, go to the "Additional Trading Tools" section and select OptionTrader.
In advanced order mode, enter the "Trading Instruments" menu and in the "Options Center" section, select OptionTrader.
Window components
The usual layout of the window consists of sectors for tracking quotes, creating and managing orders, and for viewing option chains.
Quote panel
Live quotes give you the opportunity to follow the movement of the underlying price.
Choose for yourself which fields will be displayed. To add/remove a field, click on the wrench icon.
Click on the bookmark with a "+" sign to add a new page.
The field for entering the underlying contains a drop-down list with previously used characters.
The "T", "S" and "B" icons in the right corner of the quotes panel allow you to quickly (de)activate the display of the toolbar, statistics or buttons.
Statistics panel
Option price data contains information that can help you guess the mood in the markets: changes in volatility, trading volume, put/call ratios, and open interest.
The statistics panel is designed to view these indicators for each individual underlying.
Market scanners make it possible to use these indicators to find the strongest/weakest players in order to subsequently apply the obtained data in trading.
If the panel is not visible, activate the display of statistics in the menu Configuration|Settings.
Button bar
Gives quick access to trading operations through a customizable set of buttons.
Click on the wrench icon to add/edit this or that action.
You can activate "quick mode" to instantly place an order.
Buttons that are not available will be grayed out - for example, if you do not have any positions, the "Close position" button will be inactive.
Order control panel
This panel contains several tabs with the functions of entering/changing orders, viewing executions, checking the market value of positions with real-time updated P&L indicators of the underlying and its derivatives. Use a special tool to create spreads.
Option chains
The glass of option contracts is displayed at the bottom of the window - calls on the left, puts on the right, sorted from top to bottom according to the distance of expiration.
The Autoload function (Configuration|Settings) automatically loads a specified number of contracts closest to expiration and strikes closest to the at-the-money state. To set the desired number of options, click on the wrench icon and go to the "Settings" section.
Chains are delimited by expiration, and each of the lists can be opened / hidden using the arrow in the title bar.
Use the Strikes/Expirations/Exchange/Multiplier/Trade Class buttons to filter the results. As soon as you select the contract you are interested in and close the list, the option chains will be updated automatically.
Weekly options on about 200 US underlyings allow you to trade more targeted, taking into account indicators such as company earnings, government reports and Federal Reserve announcements. These options appear at the top of the table and can be loaded/hidden using the Expiration button.
Mini options are contracts 10 times smaller than standard options with a multiplier of 10 instead of 100. To load mini options, open the "Multiplier" list. Currently available for APPL, AMZN, GOOG, GLD and SPY.
To view LEAPS long-term contracts, add/remove the required markup fields. For example, you can add Greek columns to option chains.
The Load My Circuits button allows you to view your available option positions for the selected underlying.
Background colors
In the "Description" header menu, you can activate the color coding of contracts depending on whether they are in the money or out of the money.
Right-click the Description column heading and select Color options based on in-the-money status.
⦁ In-the-money options will have a pale green background.
⦁ Out of the money options will be marked in pale red.
To set platform-wide default settings, open the Global Configuration menu and go to the "Display" section.
OptionTrader Configuration
You can open several bookmarks for different contracts at once by selecting the + bookmark and specifying the name of the new underlying. Closing the OptionTrader window will remove all tabs. To keep your bookmarks configured in OptionTrader, instead of closing the window, COLUMN it.
Right-click on a column heading in any of the panels or click on the wrench icon to go to the Global Configuration and add other columns to your options chain, such as Greeks: delta, gamma, vega, theta, or implied volatility or other indicators .
Creating orders
In the option chains window, simply click:
Ask for a call or put to create a BUY order.
A call or put bid to create a SELL order.
Order control panel
Bookmark "Orders" - the line with the order appears in a separate segment below the quotes panel and is automatically filled with default values.
Manage/modify/transfer running orders in the orders tab.
Right-click to attach an automatic, trailing stop or bracket.
Attach a trailing stop to Smart Routed Limit Orders and enter an additional price (the trailing amount) as well as a limit stop price on the order line.
Option brackets must be sent to the BOX exchange. Add a Destination column and select BOX before placing the bracket order.
The Volatility Order Type is a unique TWS feature that allows you to trade volatility and calculate an option's limit price based on implied volatility. You enter the desired volatility and TWS calculates the limit price.
As soon as you activate volatility trading in TWS, the bid and ask will show volatility, not prices - there will be a percent sign opposite the values.
Log bookmark – records of actions performed in the OptionTrader with the specified underlying.
Trades tab – executed orders for the specified underlying. To check the strike price of each leg in the spread, click on the Multilevel sign to reveal the combo line.
Portfolio tab – displays current P&L positions for the held underlying and any of its derivatives.
The Combination tab allows you to quickly create a spread on the order control panel.
Click on the bid/ask price of the desired calls or puts from the option chain to add them to the combo table, or set the parameters for each leg manually using the drop-down menus.
On the right, as you add legs, the strategy graph will appear.
Click Add share to enable the leg to buy/sell shares of the underlying asset.
The Make Delta Neutral function will automatically add a hedging leg to buy/sell the underlying shares for the total amount of delta. You can use the delta calculated by the system or set your own.
You can Place an Order directly from the Combination Editor or Add to Quote Panel to create a quote line with an estimated spread price.
Credit and debit spreads are color-coded in the bid/ask fields, as well as to the left of the "Place" button.
The spread remains liquid as long as each of the legs is liquid. If there is no bid or ask in the line with the estimated spread price, then one or more legs have become unrealizable.
Check risk
Before placing an order, right-click on the order line and select Check Risk to see the possible impact on your portfolio risk. The P&L chart consists of a line representing your current profit or loss and a line of profit or loss if an unplaced order is executed.
For a more detailed analysis, launch the "What If" function of the Risk Navigator by clicking on the View Details button in the upper left corner.
Toolbar functions
To display the OptionTrader toolbar, click on the "T" icon located to the right above the quotes panel.
Show volatility
The "Show volatility" button allows you to see the volatility value in the option chain price fields. In the Configuration menu, you can also select "Show option prices in volatility." If this option is checked, all new OptionTrader pages will display prices as volatility.
When the volatility display is activated, hovering over the bid or ask of any option will pop up a tooltip containing the amount of the option premium and its implied volatility.
Options comment
Read the daily options commentary from the IB Brief to keep up to date with market developments. Daily comments are written by analysts based on data obtained from the TWS Market Scanner.
Option spreads
Clicking the Option Spreads button will open the Combination Selection window to create a strategic combination using one of our strategy templates. To create a spread/combination:
"Multiple" tab
Allows you to simultaneously create lines with quotes for options on the same underlying.
The fields on the left are for filtering, the Ctrl+Click combination allows you to select multiple values in one box.
"Strategy" tab
Select a strategy from the dropdown list. The required fields will be added to the working area of the window.
Depending on whether you sell or buy a combination, the final action with each leg will depend.
In the working area, only those options that are suitable for the specified strategy will be offered to choose from. Expand the drop-down lists to select the expiration date, right and strike for each leg.
If the "Query market data for legs" option is enabled, rows for each leg will be added to the quote panel in addition to the implied spread price.
Bookmark "Pair or in stages"
Allows you to create your own combination by manually specifying each spread component.
You can set leg parameters in the value table or simply drag and drop a contract from the options chain to the bottom of the window.
When you have added all the legs you want, click "OK" to check the effect and amount of each leg.
The implied price of the combination is calculated in real time based on the price movements of the individual legs. Based on the component prices, SmartRouting can route each leg separately to the market center that offers the best price, with Masters Trade taking the risk of a partial order execution. (Guaranteed).
After you have added a quote string for the spread, you can create an order:
By pressing Ask, you will buy a combination.
By clicking Bid, you will sell the combination.
TIP: Double-click in the "Description" box in the combo quotes row to open the leg breakdown window.
Option exercise
All expiration options that meet the clearing organization's automatic exercise criteria will be exercised unless you take any action yourself.
Open the Option Exercise window (Mosaic > Account, Advanced Order Management > Trades) to either exercise the option before expiration or give an instruction other than automatic processing by the clearing house. For example, you may instruct not to exercise an option that would otherwise be exercised automatically based on the rules of the clearing house.
Please note that this process is irreversible; once you give an order to exercise an option, you can no longer cancel it.
1. From the Trades menu, select Option exercise.
2. In the Option Exercise window, select the option you want to exercise from the "Current Option Long Positions" segment.
3. Click "Perform"/"Yield".
4. Check/change the number of options you are going to exercise/yield and click "OK".
5. After that, you will see a message asking you to confirm your intention to exercise / assign the selected option - as soon as you click "YES", the action will be irreversible.
The exercised option will appear in the "Unrealized Exercises" segment, where it will remain until settlement.
Note: Some options, including but not limited to options subjected to corporate events, may not be exercisable by this method, so you will need to manually file a support ticket.
Price/risk analysis
Option chain market data is processed by analytical tools integrated into the OptionTrader panel.
Risk Navigator
Find out the riskiness of your portfolio across multiple asset types or separately by position, underlying or industry using the SM Risk Navigator hosted by TWS.
The risk navigator allows you to quickly identify the risk to which your portfolio as a whole is exposed to its individual parts, with the ability to view several reports at the same time.
You can arbitrarily change the dates, prices, and volatility of your portfolio, its segment, or a specific underlying, and the Think & Trade Risk Navigator will show the results of your custom analysis along with the results of the current market conditions.
To perform a custom analysis, open the report and select Custom Scenario from the View menu.
The script editor is located on the right side of the new window. Specify the date, price and volatility at your discretion.
You can filter affected underlyings by selecting All, Any, a specific contract, or an arbitrary group of contracts (using Ctrl + Click).
You can change prices and volatility by specifying the change as a percentage (% Chg) or as an absolute value (Chg), or by entering a specific value (ExpV).
The results derived from your custom portfolio parameters will be displayed in the Custom Scenario table, next to a scenario built from real-time market data.
Options analytics
Check the risk of your options positions based on the values of the popular "Greeks" - delta, gamma, vega and theta.
Options risk (both calls and puts) can be calculated for all contracts on the active page.
The price chart shows how much the contract price can change depending on the change in the underlying price.
At the bottom of the window, check the boxes for the conditions that you want to display on the chart for assessing time risk and volatility.
Vol-down reduces the implied volatility by 15% relative to the original.
Vol-up increases the implied volatility by 15% relative to the original.
T-down shortens the period until expiration by one calendar day.
To zoom in, select the part of the graph that interests you with the mouse.
Model Navigator
Use current market data in addition to interest rates and dividend levels to calculate implied volatility and option model prices. Specify your expectations regarding price movement and recalculate option prices based on new data.
When patterns are added to the Option Chain columns, they are colored differently depending on their relationship to the current bid and ask prices.
In the Global configuration there is a special section "Volatility and analytics" where you can activate the function "Read saved options patterns at startup".
Intended margin and excess liquidity at expiration
Two new fields have been added to the TWS Account window under "Margin Requirements" and "Funds Available for Trading":
Margin after expiration at open (predicted) - allows you to check the margin status of expiring contracts.
Excess after expiration (predicted) - makes it possible to check the level of excess liquidity of expiring contracts.
The values in these fields appear shortly before expiration and are highlighted in red. The rest of the time it is "0". These forecast values take into account the expected value of the entire portfolio, including the expiring contract. To see the predicted margin and excess liquidity for an expiring contract specifically, double click on the row.
Options Rollover and Option Selling Instrument
Two options trading tools, Options Rollover and Options Selling, allow you to quickly set up a rollover or contract to sell a call or put against existing long/short stock positions.
In each tab, you will be prompted to set the selection criteria, after which you will need to click the Refresh button to create a list of suitable contracts. To edit a contract, click on the pencil icon.
Options rollover
To avoid delivery of expired options and options on futures, you must extend or close positions before the end of the last trading day before expiration.
Use the Option Rollover feature to quickly determine which contracts in your portfolio are expiring and trade them for similar options with a later expiration date.
The description field contains drop-down lists from which you can select transfer criteria.
Click Refresh to see a list of eligible contracts for which you can trade the expiring option.
The pencil icon next to the option names allows you to make changes to the selected contract.
Select an order type and, optionally, an offset in price, and then click Create Orders.
Calendar spreads are displayed in Order Management. Checking and placement.
Option selling tool
Sell calls against longs, puts against shorts, or combine them into collars with the Sell Options tool, which shows all your long/short positions.
Collar options have recently become available, so you can now sell calls and buy puts against long positions, or buy calls and sell puts against short positions. Simply check both boxes: Sell Covered Calls and Buy Protective Puts in the Description section. New columns will be added depending on your choice.
The Description section contains drop-down lists for quickly defining selection criteria.
Click Refresh to see a list of contracts that match your criteria.
TWS calculates how many contracts to create based on your current long/short stock positions and determines how to allocate them to advisor sub-accounts.
Creation of orders. Orders will be displayed on the "Trade" panel.
Checking and placement.
Building a volatility chart
You can see a graphical representation of the underlying volatility.
In the chart window, on the toolbar, click on the "Chart Options" icon and in the What to show list, select historical volatility, implied volatility, open interest, or option volume as the main or secondary data source.
Our OptionTrader trading tool will take options traders a step further.
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