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Duration: 8:33

Instructor:

Contributor: Interactive Brokers

Level: Beginner

In this Traders’ Academy lesson, we’ll discuss options using IBKR Mobile on your iPhone. You’ll learn how to: View option chains; customize the option chain display, expiry, trading class, and a number of strikes and columns displayed; create a multi-leg combo using the Strategy and add options and option combos to the Watchlist.

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Study Notes:

With IBKR Mobile you can view chains on any stock or futures instrument that has options, including index options.

From the watchlist, tap a financial instrument then tap again to display the Quote Details. Tap Options at the top of the Quote Details screen.

View chains by expiry by tapping an expiration date, swipe to see more choices.  You’ll see call information on the left and put information on the right. Highlight a quote line by tapping the screen on the call or put side. Buttons will appear at the bottom of the screen. Here you can choose to create a sell or buy order, view the option details, add it to your watchlist or Use Strategy Builder.

Change the number of option values displayed below the quote line by tapping the arrow on the top right. Here you’ll see the VWAP, Option Volume, Implied and Historical Volatilities, Put Call Interest and Put Call Volume, and more. Hide these values by tapping the arrow.

The Implied Volatility shown at the top of the Strike column reflects the implied volatility for the selected expiry.

You can configure the chains display by tapping the three vertical “adjustment” lines in the top right corner next to the destination. Here’s where you can adjust the number of strikes displayed, time period and whether or not to show the number of days to the last trading day on the tabs, the trading class for the option, and decide whether to display or hide weekly options.

In this example, let’s add this Option to a Watchlist. Now you’ll see the Option display in the Watchlist.

We can customize the Watchlist to add Option-related columns. To do this, tap the column icon and select + Add Columns. To add the Option Greeks, tap Greeks. Next I’ll select Delta and Gamma. Tap Done and see the new columns display.

As you saw earlier when viewing option chains, you can enable the strategy builder using the slider. Simply tap the bid or ask price for a call or put to add legs to your strategy. You’ll see the option legs appear at the bottom of the screen.  If you want to remove the legs and start over – just tap the “x” on the far right. For equity options strategies, include a stock leg by tapping the box Add Stock Leg. You can adjust the side and the quantity for each leg displayed. You’ll see the estimated combo premium display on the lower left.

When your strategy is complete, tap Order to trade or +Watchlist to add the strategy to your watchlist. Let’s tap the Option Combo and view the details. You’ll see the legs listed along with a new performance detail feature.  Here’s where you can analyze option and spread characteristics, including Return-to-Risk Ratio, Profit Probability, Delta, Max Return, Max Loss, breakeven and more.

The Performance Graph displays the profit and loss profile for the trade at the time of expiration. The price movement can be adjusted for 5, 10 or 30% moves in the underlying and displays the P&L on any given day leading up to the expiration versus the original P&L at the time of the trade.

The Performance Graph may also be configured to display any of the Greek values using the dropdown menu on the right. For example, by selecting Delta and sticking with the expiration date, you can see the position exposure at any given price for the underlying. Change the date to see exposure ahead of expiration.

Note that the Scenario section below will populate with data to reflect P&L for the option position for movements in the value of the underlying share price ranging from -30 to + 30%.

The order details below that may be adjusted.  You can also attach a profit taker, stop loss or bracket order and even initiate Ask iBot for more options. Tap the Submit button at the bottom to transmit your order. Preview will display the commission, amount and margin impact.

Spread Grid Tool

On the Quote Details screen, you’ll see next to Options, Spreads. Spread templates make it easy to create a complex multi-leg spread by providing a picklist of the most used strategies and an intuitive grid display for spreads. The new spread template lets you quickly compare prices across a range of similar combinations and pick the one you want. Easily compare tightness of the bid/ask spread for multiple strategies and quickly pick the one with the best spread. And – search for the most appropriate strategy to hedge an existing position via the Delta and Gamma display in each grid box. This here is the new spread grid tool which provides a range of strategies in a grid format. Each box in the grid displays key information such as price, spread, Delta and Gamma. Choose from the 3 available strategies – Calendar, Vertical and Diagonal spread.

For instance, I can choose Calendar spread, optionally change the exchange, and toggle either calls or puts. Below that you can select the front expiry for the calendar spread.  The grid will adjust based on the front expiry selection. The grid displays key information to help you pick the best spread for your needs, including delta, gamma, price and the bid/ask spread. You can fine-tune grid strategies by adjusting filters. Below the tile you can view the leg details, add a stock leg and view the performance profile. Use the buttons at the bottom to submit the order or tap the eye icon to add it to your watchlist.   The arrow will display the spread on the Quote Details screen.

Option Exercise

IBKR Mobile has just introduced a tool for Option Exercise. To use this new tool, open the Option Exercise screen from the Trade section of the More menu.  At the top of the screen, you can show all, view the upcoming exercises or ExDividends or choose an expiration. Tap a contract to view details then tap again for extended quote details. I’ll select 30 days and it will show my long and short positions. From here I can view more details and create a sell or buy order.

Back on the Option Exercise screen, I can tap the box icon on the top right to adjust or insert additional columns.

Summary

In this lesson we have shown you how to access option chains and, utilize the Strategy Builder to create multi-leg strategies on the iPhone. We also walked through a few new tools such as the spread template grid and the option exercise tool. When you continue, we will give you a short quiz to test your understanding of the material we covered today.

Disclosure: Interactive Brokers

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Supporting documentation for any claims and statistical information will be provided upon request.

Any stock, options or futures symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

Disclosure: Margin Trading

Trading on margin is only for sophisticated investors with high risk tolerance. You may lose more than your initial investment.

For additional information regarding margin loan rates, see ibkr.com/interest

Disclosure: Options Trading

Options involve risk and are not suitable for all investors. For more information read the “Characteristics and Risks of Standardized Options” also known as the options disclosure document (ODD). To receive a copy of the ODD call 312-542-6901 or click here. Multiple leg strategies, including spreads, will incur multiple commission charges.

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