Right click on column headers in any of the panels or use the wrench icon to access Global Configuration screens – for example, customize the option chains with the Greek risk measures Delta, Gamma, Vega, Theta, etc.
In the Option Chains, click the bid or ask price of the selected option to create a trade.
– click on the ASK price of a call or a put to create a BUY order
– click on the BID price of a call or a put to create a SELL order
The order will be reflected in the Mosaic Order Entry window where you can modify the option price, quantity and order type as needed. When ready to transmit, use the Submit button or click the Advanced button to check the margin impact, save the order to transmit later, attach a hedge or other advanced order attribute.
View the working order in the Mosaic Activity Monitor.
Use the Strategy Builder button to easily build complex, multi-leg strategies in the Option Chains by selecting the Bid or Ask price of a call or put to add a leg to your strategy.
To create custom strategies in the Strategy Builder:
click on the Ask price (blue) of an option to add as a BUY leg
click on the BID price (red) of an option to add as a SELL leg.
Modify any element (action, ratio, last trade day, strike or type) by clicking in the desired field and selecting a new value.
A new Predefined Strategies pick list has been added.
Use the buttons along the bottom of the Strategy Builder to:
This grid interface, accessible from the Option Chain title bar, can be used to easily compare prices, spread tightness, Delta, and Gamma across a range of similar strategies.
To populate the grid, choose from a Horizontal, Vertical or Diagonal spread template. The grid layout appears with the view centered near the current strike price.
When the Strategy Builder is activated, a specialized Order Entry panel opens to specify the order parameters. Click the Submit button to transmit the order.
The Advanced+ button in the strategy builder order panel gives you additional choices:
Because you can build either a debit or credit spread using the same contracts, pay attention to the pricing conventions for debit/credit spreads:
Always check your trade before transmitting!
The + Profile helps demonstrate the key performance characteristics of an option or complex option strategy — before you submit the trade. You can also access from the Strategy Builder Order Entry row advanced+ button > Margin/Performance.
A new drop down in the Scenarios panel of the Performance Profile window lets you choose between displaying the "Instrument Greeks" that show the traditional contract Greeks, and the "Position Greeks" calculated using (Greek value x position), are identified in the Scenarios panel with a "P" prefix.
For strategies that use different underlyings, "Instrument Greeks" are not available and the selector is disabled.
View spread and other complex multi-leg positions as a single line entry in your Portfolio tab and in the Account Information window. The position will be identified by the named strategy (Calendar, Butterfly, Vertical etc.) where applicable. Drill-down with the "+" icon next to the complex position title to view individual legs.
TWS shows the named strategy for your spread position along with the net market value, average price, and realized/unrealized P&L for the position. You can add this complex position to any of your Watchlists — with the Strategy Builder Add to Watchlist button or manually use Copy (Ctrl+C) and Paste (Ctrl+V) to add to a blank line in a watchlist/ monitor.
Use Global Configuration > Display > Ticker Row to choose whether to view or hide complex positions.
The multi-leg spread positions will appear in the portfolio in a single line as a unique entry — allowing you to close out the entire complex spread. Right-click on the complex position then select Close. Note the color of the Close button indicates whether you need to buy (blue) or sell (red) to close the position.
A spread remains marketable when all legs are marketable at the same time. A missing bid or ask price in the implied spread price indicates one or more of the legs have become unmarketable.
To close or roll each leg of the spread individually — start with the "+" to expand the complex position to show each held leg. Right click on a leg and choose Close or Roll from the right-click menu.
You can also choose to close just one side of a multi-leg option spread that has more than two legs, like an Iron Condor or Box, using the right-click menu in your Portfolio window. For available strategies, two buttons show in the right-click menu to "Close Combo Calls" or "Close Combo Puts".
Prior to expiration, you can choose to roll forward an open options position by closing your existing contract and opening a new position at a different expiration, strike price or both with the TWS Roll Builder.
Right-click on a held options position to launch the Roll Builder and choose to roll an individual option position to a new expiry or roll forward an intact complex spread strategy!
Note the color of the Roll button indicates the buy/sell action for your held position.
The Mosaic Roll Builder opens with Option Chains listed by Expiry and Strike price at the top of the window. Additional LTD and strikes can be added using the buttons in the upper right.
Select the 'roll to' contract for each leg. When adding roll-to contracts, TWS pre-selects the buy/sell action to logically match your original combination.
Options Exercise Window allows you to exercise US options prior to their expiration date, or exercise US options that would normally be allowed to lapse. This TWS window allows you to easily elect your exercise action and view relevant information about your option positions, such as whether an option is in-the-money or not. Access the Options Exercise window from the Mosaic Account menu.
The Option Exercise window displays actionable Long positions in the top half of the page, and non-actionable Short positions in the bottom half of the window.
Accounts that hold dividend-paying positions that may be affected by early exercise will receive notification via IB FYI email and in the Option Exercise window in the Optimal Action field approximately two days before the underlying goes ex-dividend. (Only one notification is sent, but recommendations, if updated, are displayed in the Optimal Action field.)
You can also automatically exercise US dividend-related stock and ETF options. If you select the Automatic Action, in Account Management > Settings > Account Settings > IB FYI set up. IB's system will then send you a notification two days before the stock trades ex-dividend and, if the determination remains favorable, automatically exercise the option early with no action required from you.
To better understand the mechanics of dividend-related early exercise, see the IB Knowledge Base article Considerations for Exercising Call Options Prior to Expiration.
Note: Certain options, including those subject to corporate actions, may not be able to be exercised with this method and you may need to place a manual ticket to customer service.
Beyond what has been covered in this presentation, here are some Analytical tools with links to additional information:
Evaluate multiple complex option strategies tailored to your forecast for an underlying with the Options Strategy Lab. Plug in your estimate for a Stock or ETF and TWS will return a variety of option strategies that are likely to have favorable outcomes with your forecast. You can analyze each potential strategy to find one with the lowest price, highest risk/reward ratio, largest maximum gain or smallest maximum loss based on your price or volatility parameters.
The Probability Lab SM offers a practical way to think about options without the complicated mathematics. Use the Probability Lab to analyze the market's probability distribution, which shows what the market believes are the chances that certain outcomes will occur. Adjust based on your own forecast.
Use the grab-and-pull bars in the dynamic market-implied Probability Distribution to create your own custom Probability Distribution. Always see your prediction alongside the market implied calculation.
The Volatility Lab provides a snapshot of past and future readings for volatility on a stock, its industry peers and some measure of the broad market. Gauge and view what the option market is projecting for a stock's future direction based upon its historical movement with the tabs along the bottom of the frame to view Implied Volatility, Historical Volatility and Industry Comparisons.