We have released a new version of the Option Workshop. Main changes are around the FOS (Futures Orders Stairs) feature. We've rewritten it from scratch. Documentation is not updated yet, thus, a brief description of what has changed below.
The main feature we've added in this version is an ability to “rotate” market data subscriptions. The problem which we were trying to solve is the limitation on a number of instruments, for which market data you can subscribe simultaneously. In Interactive Brokers TWS this limit is very low, only 100 instruments. CQG limit is about 400, IQ Feed - 500. You buy an extension for this limits, but it is not cheap.
A new Mnns (moneyness) column that shows the option status: in the money, at the money, out of the money
A new Risks tab. Now the tab shows only the total number of underlying contracts to be settled if in the money options expire right now.
In the next updates, we plan to add more useful information about strategy in this tab
Changes in the Charts form:
The ability to bind the Charts form with the active (selected) strategy in the Positions manager.
The form will show a chart for the currently selected strategy in the Position manager
The ability to display the P&L chart taking the commission for the fills into account
In the Option Desk, the bid and ask cells are now highlighted if the best bid/ask price is higher/lower than the theoretical price.
In the new version, you can add contracts to the market maker by dragging a position or a strategy into the market maker setting form.
You can read more about these and other changes in this article.
Bear Call Spread. An alternative name is Credit Call Spread.
It is a vertical spread involving an equal number of long and short calls on the same underlying asset and with the same expiration date.
It is a credit spread, which means you receive money to put on the position.
The strategy profits as long as the price of the underlying security remains below the breakeven point.
Options used in the combination
Sell to open one at-the-money (ATM) call and simultaneously buy to open one out-of-the money (OTM) call.
The strike price of the short call is below that of the long call.
The advantage of this spread is that it benefits from time decay and provides an immediate inflow of cash.
The maximum gain and loss on the spread are very limited and well defined.
We prepared a major update for Option Workshop. Many new features have been added to help our users trade efficiently.
There are two new tabs in the Positions manager:
Orders – contains orders that are linked to selected strategy.
On this form, you can place or cancel orders, and shift orders one step up or down from the midmarket price.
Notes – contains text comments about the selected strategy.
You can write comments on any strategy. Notes are displayed when you hover the cursor over the strategy name.
In the new version, you can change the position’s opening price, set the commission for the exchange/underlying assets/option series/futures,
display the IV curves for several pricing models simultaneously, etc. We will discuss these and other features in this article.
Neutral position. It is a combination involving an equal number of long puts and long calls at the same strike price and the same expiration date.
It is a debit combination, which means you must pay to put on the position.
The strategy profits when the price of the underlying security moves up or down beyond the breakeven points.
Options used in the combination
Buy to open one at-the-money (ATM) call and simultaneously buy to open one ATM put.
Both options derive from the same underlying stock and have the same strike price and expiration date.
The advantage of this combination is that it benefits from volatility, independent of the direction of stock price movement.
Both the put and the call have (potentially) unlimited upsides but limited loss exposure.