Learn how to use the OptionTrader to create strategies, review statistics and trade options more efficient and faster.
Accessing the OptionTrader
- Open TWS. If you didn’t install TWS yet, you can do so here.
- Navigate to Trading Tools in the top left of TWS.
- In the pop-up menu, select OptionTrader under the Options/Event Focus section.
Parts of the OptionTrader
At the top of the OptionTrader is the toolbar. Using the tool bar an investor can easily and quickly:
- Add additional tabs to run multiple Option Chains
- Cancel all orders on a tab
- Clear the log
- Show the option pricing in volatility terms
- Bring up the TWS Combo Trader by clicking on the Option Spreads
- Bring up Risk Navigator, Option Analytics, or the Model Navigator by clicking on Analytics
- Go to the IBKR Trader Insight commentary, and configure the OptionTrader
- Quote Panel: Displays underlying asset
- Customize data columns using the Configure icon
- Create orders by clicking bid (sell) or offer (buy) in the Quote Panel
- Orders appear in the Orders tab of the Trading Panel
- Offers various option-related data and statistics (including option volume, put/call volume, option volume change percentage, historical and implied volatility information)
- Customize columns with the Configure icon
To enhance functionality, an investor has the option to incorporate action buttons into the Option Trader. These buttons enable quick order creation, access to other Trader Workstation tools, or order cancellation. To create new buttons or modify existing ones, simply click on the Edit icon at the top right-hand side of the panel. Once the configure area is displayed, various actions can be performed:
- Create a new button
- Edit an existing one
- Remove an existing one
- Change the location of a button
- Duplicate a button
Continuing downward on the OptionTrader is the Trading Panel, which consist of five tabs:
- The Order tab displays open stock and option orders created in the OptionTrader for the underlying.
- The Activity Log tab displays actions taken on the OptionTrader such as buys, sells, and cancels.
- The Trades tab displays completed trades that originated from the OptionTrader.
- The Portfolio tab displays the entire stock and option position for the underlying in the OptionTrader.
- The Strategy Builder tab which allows you to create multi-leg complex spread orders without leaving the OptionTrader.
An investor can choose a strategy from the drop-down menu and begin selecting strikes. Once selected, you can change the ratio, expiration, strike, add a stock order, and make delta neutral if they choose to. When ready to send the order, they click Transmit.
The Option Trader Option Chain will automatically populate with the strikes of the underlying selected. You can choose between a list or tabbed view. In list view mode, scroll downward to see each expiration, while tab view will show one expiration per tab. To change the expirations shown, click on More and choose an expiration. That expiration will be shown along with the two previous ones and the following one.
The Option Chain can be adjusted to show either calls & puts, just calls, or just puts as well as the number of strikes to display, exchange, and trading class.
Trading in the OptionTrader
- Select the Underlying: You can search the preferred underlying in the search bar in the top left.
- Select an Option: To select an Option for trading, you can either click on the ask or bid price of a particular option. This will either open the order ticket or add the option contract to the Orders tab, should real time market data be enabled. If you right-click the option, this will populate a context menu with actions such as opening a chart, analysis and trading tools and much more.
- Select a Strategy: If you desire trading an option strategy instead, switch to the Strategy Builder tab in the trading panel. From there you can click the Strategies button which opens a selection of option strategies to choose from. Now you can select one and then click on a leg to apply it.
- Create a Strategy: When in Strategy Builder, instead of choosing a Strategy, you are free to create one on your own. Simply click the ask/bid price of your desired legs to add them to the strategy. In addition, you can add the underlying stock, reverse the whole strategy or even make it delta neutral. You can add up to six legs to each strategy.
The Load My Chains feature is unique to the OptionTrader Option Chain and when clicked, it will bring up the option chains for existing option positions in the underlying in your portfolio.
Creating an Order in the Option Trader
When using the OptionTrader to create an option order, follow these steps:
- Select Expiration and Strike: Choose the desired expiration date and hover your mouse over either the Bid or Ask price of the strike you’re interested in.
- Mouse Hover Indicators: As you hover the mouse, the background color changes to blue over the Ask price (indicating a Buy), and red over the Bid price (indicating a Sell).
- Creating the Order: Click on the appropriate side (Buy or Sell), and this action will populate the Order tab.
- Customize Order Details: Adjust the order’s size, Time in Force, Order Type, and price to align with your preferences.
- Order Confirmation: When you’re ready to proceed, click on the “T” button in the status column. An order confirmation box will appear.
- Confirm and Transmit: Review the order details in the confirmation box and, if accurate, click Transmit to send the order.
All products are available for trading through OptionTrader.
Although it is not necessary to subscribe to real-time market data, we recommend to request it. Therewith you are enabled to access real time charts and quotes to improve your trading experience.
Learn here to to request real-time market data.
The OptionTrader allows you to trade single options and lets you choose from predefined strategies such as vertical spreads, strangles, straddles, iron condors and many more. In addition you can create strategies on your own selecting them leg-by-leg. Please acknowledge the following limitations:
- A maximum of 6 legs including the underlying stock can be set up as an option strategy.
- All legs need to refer to the same underlying