Trader Workstation presents a consistent look and feel across screens, and more user control over the workspace, with the independent component features in TWS that we’ll be looking at in today’s session -- Intermediate TWS.
- The self-contained OptionTrader, displays customizable option chains data, with access to pricing tools, risk analytics and complete order management including spread templates with drag & drop functionality.
- Real-time line, bar or candlestick Charts, add studies, trendlines include the ability to set up and manage trades without leaving the chart window. New is the ability to chart option volatilities.
- IntermediateTWS - Enhanced basket order functionality that lets you create a basket file to use repeatedly, even select an index-based basket order or define your own index parameters to create a basket.
- The new SpreadTrader tool helps you easily enter futures calendar spreads and now you can also swap a long/short stock position for a single-stock future (SSF).
- Market Depth window displays an aggregate of the best bids and offers available from all markets, Level II and NYSE Open Book are available by subscription
- BookTrader gives single click order transmission traders a deep window view of bid and offers – use for speed in trading when seconds matter.
- Money managers can use the Rebalance feature to have TWS to automatically compute the trade quantities required to bring your portfolio into balance.
Each of these components functions independently, yet they all share common elements allowing you to view market data, submit and manage orders, monitor activity logs, view execution reports and your portfolio positions.
Shared settings such as order defaults, market data layout, hot keys and buttons can all be customized through the Global Configuration screen.
Simulated Trading Environment
You’ll notice today I’m in a simulated or “paper” trading environment using real market conditions. Trades don’t actually execute, but the price of your ‘executions’ will be determined by real market prices and sizes. Simulated account values and positions will update realtime.
Use a paper trading account to learn TWS order types without risk, test your trading strategies and learn market dynamics for new products and exchanges. Even test API (Application Program Interface) applications.
Just follow the links on the IB website, from the Software menu find Paper Trader. There’s no charge for the account but you do need an active IB account so we can mirror the base currency, market data subscriptions and trading permissions.
We will be looking at the self-contained feature components of Trader Workstation. You are all probably familiar by now with the Feature Selector periodically popping up at startup suggesting to disable unused features. If you’ve agreed, chances are you may not see the same icons I’m displaying on my toolbar.
It’s easy to re-enable the components, choose Feature Selector,
- Order Management
- Order Entry Tools
- Market Data Tools
- Technical Analytics
Then choose Apply and OK. You’ll notice the icons appear on the Trading Window toolbar.
The self-contained OptionTrader, displays customizable option chains, with access to pricing tools, risk analytics and complete order management including spread templates with drag & drop functionality.
- OptionTrader window opens to display the familiar trader tool layout with a quote line to monitor price variations for the underlying and an order management panel
- Click Load Chains button to load data for all options for an underlying
- All available option chains display organized by Expiry month and strike price.
- CALLS on the right, PUTS on the left
- Scroll to view listed LEAPS
- If you prefer you can filter for specific contracts using the Strike, Expiry and Exchange buttons.
- Use Clear Chains to remove data and clear the screen.
- Use Strike, Expiry and Exchange buttons to filter options to include in the option chain.
- Once criteria is set, click Load Chains for the filtered list of option contracts
- Create an order – same as throughout TWS
- Click the Bid/Ask price of the selected option chain
- The familiar order line layout appears in order management panel.
- Log, Execution and Portfolio tabs allow access to basic TWS data for complete order management
- Use the Configure screen to add market data fields, including the Greeks risk dimension values, custom buttons, shortcuts and hotkeys to your window.
- The chains displayed feed the Option Model Editor and Options Analytics windows.
Creating a Spread
There are two basics steps to creating a Spread/Combination order:
- Define the combination
Identify the contracts to be used in creating the spread. Once the legs are defined, TWS calculates the difference between the contracts and displays implied combination prices in the quote panel with a combination market data line – easily distinguishable with the magenta text.
- Create/Submit an order
From this line of combination market data, the same quick-click order entry process you use throughout TWS applies. Click the bid or ask field to initiate an order line with pre-set values. Review, modify & transmit.
Define the Spread/combination
In OptionTrader you can create Option Spreads and combinations using named strategy templates or use a generic form to create your own.
Click the Option Spread button, notice the two page tabs:
- Combo template – Select a named strategy using the drop down menu. Use the Worksheet area to define combination criteria. Our context-sensitive fields help ensure that your data is accurate.
NOTE: The template fields are responsive to your entries (relative to the selected strategy). For example, a butterfly spread uses options with the same expiry, so once you choose the expiry for the first leg, the expiry for the remaining legs are automatically set.
- Generic Combo – You can create a unique combination by manually defining an order leg by leg on this tab. Use the fields on the tab to identify each contract leg in the spread. Or simply drag and drop a contract from the trading screen into the Leg Definition area, using the pushpin to anchor combination window.
When you click OK the combination line is created in the Quote Panel. Magenta text identifies the implied combination price.
Create a Spread Order
- Submit orders to buy or sell the spread by clicking this implied bid or ask price in the interactive quote line.
TIP – double click the description box to view how the combination was constructed to see how the legs would be structured on a buy or sell order.
- An order line is created in the order management panel, where you can modify parameters and transmit the order.
TWS calculates the implied spread price, based on the underlying price of each leg, and changes with variations in the price of each leg. Based on the implied price, SmartRouting will route each leg of the order separately to get the best price.
Analytical tools are provided in the OptionTrader at no additional cost. There’s a self paced interactive tour and a monthly webinar for further detail on:
- Portfolio Analytics – assess the risk of your entire portfolio across asset classes and look at the risk of “What-if” scenarios;
- Option Analytics – focus on the risk and valuation of specific option contracts.
- Option Modeler – calculate model option prices based on your pricing assumptions, which are then displayed throughout TWS wherever that option class appears.
Real-time line, bar or candlestick charts, also include the ability to set up and manage trades without leaving the chart window. The enhanced Real-time Charts now include the ability to chart Option Implied Volatility, Historical Volatility, Option Volume and Option Open Interest as focus for the chart rather than price.
Chart Parameter window allows you to select basic chart settings. Choose to Bypass the set-up window and basic parameters for all charts are set—which can be changed using the Chart Parameters toolbar icon.
There’s a full length webinar presented monthly devoted to the interactive charts feature so I’ll just point out the highlights:
- Display Time Panel to enable ability to change time parameters of the chart on the fly.
- Chart Studies – Allow you to look for peaks, bottoms, trends, patterns and other factors affecting price movement by adding studies to your chart.
- Select the Add Studies icon and choose from simple, weighted or exponential moving averages to any of the available studies. Depending on the study, some will appear as an overlay on the chart, others are displayed in separate panels below the chart.
- Note the color-coded key beneath the chart identifies all lines by color.
- Zoom Tools and Crosshair mode allow you view candlesticks and chart specifics clearly for defined periods. Select the toolbar icon and then click and drag cursor in chart to define period to view.
- Crosshair mode – select icon then hover mouse over a time period within the chart and a Price/Value window appears with data.
- Full Screen icon removes menus and toolbar for an uncluttered chart view. Chart functions become available through the right click menu. Click icon again to restore normal view.
- ChartTrader – allows you to create and transmit orders directly from a real-time chart. Buttons located under the Quote Panel allow you to position an order line in the chart window - Blue line for a buy and Red line for a sell order.
- Activate the ChartTrader panel from the toolbar icon
- Use the buttons located under the Quote Panel to create, modify and submit orders.
- Select the Buy/Sell button, and you activate an order line (blue = buy and red = sell order)
- Click in the chart to anchor the order line.
- Click on the Crosshairs icon to release the order mode
- Order price shows as either blue or red line in the chart’s legend.
- Order type displays in the order status colors on the right side of the order line.
- Orders can be modified by repositioning the chart order line or by using the order management panel to modify order value fields.
- Be sure to use the T or the Transmit button to complete the order.
Enhanced basket order functionality allows you create a basket file for repeated use, select an index-based basket or define your own index parameters to create a basket.
A basket order is pre-defined and saved as a file that you can open whenever you want to transmit the basket. You can modify a basket order before you send it by adding or removing assets, changing the multiplier and quantities, etc.
You must first create a Basket File, and then you can create a basket order.
Create a basket file
- Create a new trading window tab through the Page new command. The name you select for the page will identify the basket file.
Note: When you create a basket file, you can only include contracts from the same Trading page.
- Add market data lines for the contracts to include in the basket.
- Click the bid or ask price to create and modify orders on the trading page for each contract to include in the basket.
- Modify order parameters if needed.
- Then from the File menu select Save Orders as Basket.
DO NOT TRANSMIT THESE ORDERS
- In the dialog box, accept the file name and assigned directory -- IntermediateTWS will search this default directory for basket files. (You can change the default directory, but will have to remember to redirect TWS to that location.) The file name defaults to the page tab title.
- Be sure to cancel the orders created above on the Trading tab. Use the Order menu and select Cancel Page.
Once you have created a basket file, it can then be loaded into IntermediateTWS.
Click on the IntermediateTWS toolbar icon.
- Click on Browse button and select the predefined basket file.
- Note: The system uses the Trading page name as the default basket name. You may change the basket name, but must keep the directory structure and the .bsk filename extension in order to import the file and submit a basket order.
- Modify the Multiplier if necessary. This value multiplies the quantity of each order in the basket.
- Click the Load button and the Order panel will populate with the selected basket file.
You can also elect to create a basket file based on a selected index using the index composition or a statistical composition.
Open IntermediateTWS and select “Show Index Panel” button. This just displays an additional panel, while reducing the orders panel to allow you to specify index-based components.
- Use the criteria selections to fine-tune your index basket. If you choose to base your index basket on the index composition, the system automatically keeps the basket in line with the index composition as it changes.
- Click Load to populate the Orders panel with the basket order.
- Select the “Hide Index Panel” button to view the orders panel with your basket displayed.
- Modify order parameters if necessary, and click Transmit in the Execute Basket panel to transmit the entire basket order.
- When you send a basket order, each order in the basket is cleared individually. If your account does not meet margin requirements, it is possible that only a portion of the basket order will execute.
BookTrader gives single click order transmission trading from a deep window view of bid and offers – use for speed in trading when seconds matter. Transmit orders at any price, including the best bid and offer, from a deep book window with just a single click.
BookTrader opens a separate window displaying a series of prices above and below the best bid and offer.
Before you can trade with BookTrader, you must "arm" the application, which readies BookTrader for instantaneous order transmission.
Select a specific price row then
- Click on in the yellow Bid size column to create a BUY order.
- Click in the green Ask size column for a SELL order
- LIMIT offer – Left click on a bid or offer size to create a LIMIT offer – notice size field turns blue -- color coded for LIMIT order recognition
- STOP order – Right click on a bid or offer size to create a stop order – notice size field turns red – color coded for a Stop order recognition
- Bracket Order – Hold ALT key and left click on bid or offer size for a Bracket order. (To modify the stop offset amount for Bracket orders, on the Configure menu select Order Defaults.)
Orders transmitted use the TWS order defaults and are displayed on the Orders tab of the activity panel as well as on the Pending page of the main trading window.
Unexecuted orders can be modified - Select another bid or offer line and click in the size field. Notice BookTrader immediately cancels the unexecuted order and replaces with the new order when in single order mode. You can also drag and drop the order by the size field to new price line.
- Dark blue background in price field – Today’s high
- Red background in price field – Today’s low
- Teal background – indicates price & size of last order executed
- Order status colors are the same as throughout TWS.
- Green – order accepted and is working at the destination.
- Red – order confirmed cancelled by the system
- Maroon – an attached order type has been accepted but has yet to be elected.
- Consult the user guide for more BookTrader colors.
SpreadTrader for Futures
Our new SpreadTrader tool helps you easily enter calendar spreads and now you can also submit an EFP (Exchange for Physicals) that swaps a long/short stock position for a single-stock future (SSF) on any underlying using Spread Tables.
Notice the familiar trader tool layout including the Quote Panel for the underlying contracts, and the order management panel tabs for Orders, Log, Execution and Portfolio.
All prices are assembled in a matrix configuration and displayed in terms of spreads.
Define an underlying symbol in the Quote panel and click Enter. Then select either:
- Show Futures Spreads for XYZ - available futures contracts are displayed in the Quote panel, and for spread composition in the Spread tables beneath the activity panel.
- Spread tables are sorted by exchange, and list each leg in the Description column, and again across the top of the table.
- To create a calendar spread, click the bid or ask price at the intersection of the two desired legs.
Your spread order is displayed in the Orders tab.
- Show EFP for XYZ - TWS now supports Exchange for Physicals, which allow you to swap a long/short stock position for a single-stock future (SSF) and reduce your interest costs.
- The available futures contracts and the stock contract populate the Quote Panel and the spread matrix at the bottom of the screen, with the Stock across the top and available futures legs down the left side.
- Click a bid or ask price at the intersection of the desired futures and stock price to create the EFP order.
You can add tabs for multiple underlyings by clicking the New Tab icon on the SpreadTrader toolbar.
Note: Futures Spreads and EFPs are displayed on separated tabs – even for same underlying.
The Market Depth window displays the alternative bids and offers away from the inside quote to allow you to gauge market liquidity. For SmartRouted stocks, the Market Depth window displays an aggregate of the best bids and offers available from all markets. Level II and NYSE Open Book are available by subscription.
- Right click on an underlying and choose Tools, then choose Market Depth.
- Or select an underlying and click on toolbar Market Depth icon.
With market data subscriptions:
- For NASDAQ stocks you can elect to display the Level II window.
- For NYSE listed equities you get access to the NYSE Open Book.
You can create and transmit orders from the Underlying quote panel by clicking the bid or ask price, just as you do from the main trading window.
When you create an order from the Market Depth window, the order size is derived from the cumulative size column - not default quantity size.
- Cumulative size represents the total contract size available at a particular price or better.
- Average Price is the average execution price received when transacting the cumulative contract size.
You will receive multiple executions as your order goes through the order book. Executions can be viewed in summary on the Order Management tab or in detail from the main trading window’s Trades icon.
Maximum of 3 Market Depth, Level II or NYSE Open Book windows may be open to receive data simultaneously.
You can trade by allocating your portfolio by percentages. Use TWS to automatically compute the trade quantities required to bring your portfolio into balance. The TWS Rebalance window displays your positions, and the percent contribution each position makes to your portfolio and is available across asset classes.
The TWS Rebalance window displays all contracts in which you hold positions, and shows the percent contribution each makes to your portfolio.
Use the Rebal % field to define a new percent for all positions. TWS will automatically create buy or sell orders to rebalance your portfolio according to the new percentages you enter.
NOTE: For options and futures, the rebalance % is based on the value of the underlying prices.
Rebalance your portfolio
- Use the Rebal % field to define a new percent for all positions. TWS will automatically create buy or sell orders to rebalance your portfolio according to the new percentages you enter.
- Click the Create Orders button to instruct TWS to automatically create the orders to achieve the percent change.
- Use the Transmit All button to send all orders, or click "T" on an order line to transmit a single order.
Take into consideration that the Deliver Value could be negative and/or more than the Net Liquidation Value -- which means in the Total line, you could see a negative value or a value higher than 100%.
Options involve risk and are not suitable for all investors. For more information, read the “Characteristics and Risks of Standardized Options” before investing in options. For a copy call 203 618-5800 or click here. There is no guarantee of execution. Orders will be routed to US options exchanges.
Security futures trading involves the risk of loss, including the possibility of loss greater than your initial investment. Security futures may not be suitable for all investors. Consult your broker or financial advisor before trading. All investors will be required to review risk disclosure materials and meet suitability requirements established by their brokers. You should carefully review all disclosure statements and ensure you understand the risks of trading security futures.
Any symbols displayed are for illustrative purposes only and do not portray a recommendation.
Interactive Brokers LLC is a member of NYSE, FINRA, SIPC