Track 'n Trade LIVE Futures

Creating Complex Multi-Leg Option Order Templates

Video Transcript

In this video, I'm going to take you through and show you how to set up your own complex option strategy presets.

All we have to do is come in and look at our drop-down menu. Let's say, in this drop-down menu, we don't have a strangle, and we would like to add a strangle strategy to our drop-down. All we do is hit the add button, and you'll notice that when we do that, it brings up this control panel which allows us to build any complex four-legged option strategy that we would like.

The first thing we need to do is label it. So, we're just going to call this a "Strangle." You'll notice that we have each different leg: leg one, leg two, leg three, and leg four. What is the expiration date for leg one? Well, we're going to use the current leg, and you'll notice we can come down here and say "current leg," "next leg," "leg one," etc. For me, I'm just going to come in here to the next drop-down, and I'm going to select "option expiration." What that does is it comes in and chooses or will use the one we've selected or chosen in the drop-down ourselves.

With this strategy, we're going to have to select the options expiration date that we want ourselves. Otherwise, you could come in here and say, "Well, I want it to be the next week, the next month, or the next quarter," and the wizard would select that for you. But, we're going to keep it simple and just select the option expiration ourselves. We're going to say we want to use the same expiration as leg one for all legs, so we're not going to do a calendar strategy here. We're going to use the same expiration for all legs, so this is leg one, and we're going to repeat that down through all four legs, even though we're only going to use two legs.

The next thing we need to do is specify the amount. I'm going to have this be plus or minus one. The time period is going to be "days," and for "side," I'm going to put this on the "buy" side. We're going to put it on the exact same day as the selected options expiration date. We'll say "days" and then "buy on open." We're going to buy on the open, and for "type," this is going to be a call option. We'll set the quantity to one and increments to "number of strikes." We're going to set it to be three strikes out of the money, and we're going to place it above the at-the-money strike.

You'll notice the example output is automatically added for us as we move into the second leg. For the second leg, we’re going to do the same as leg one, with the selected option date being the same. All the time frames will remain the same as leg one. The only thing we need to change is the next leg's option type. This time, we're going to buy a put, with a quantity of one, and we're going to select three strikes below the at-the-money price.

That's a very simple strangle strategy, and that's all we need to do to put a strangle strategy in our software. Now, let's go ahead and save and close that. When we come to our drop-down, you'll notice that when we select "Strangle," it automatically drops the strangle on the screen for us and populates our order ticket. All we have to do is either bid for it or say "Market order."

Of course, before placing the order, we can always adjust it to any level we want. Now, let's come down here and look at the "Orders" tab. You'll notice that I have my working orders, which have not yet been filled. These orders have not been sent to the market yet, so any pending orders will appear in the Orders tab. Once we place the order and the orders are filled, they will move into the Positions tab.

Let's go ahead and watch that as we place our order. You'll notice that they are now placed into the market. Once they're filled, they show up in the Positions tab and are no longer in the Orders tab.