Options search engine summary

In this course we covered how the options search engine can help you find an optimal options trade for a stock when you have a time horizon and a target price range. You learned how to analyze the term structure of option analytics like put/call ratios, forward prices, and implied volatility valuations like IV Rank and IV Percentile. You also learned how to tune the option search model, filter results, and analyze prospective trades.

Next steps

Let’s say the model is tuned and this trade looks like the best way to express your underlying view. Now what?

If this is a standalone trade and you’d like to place it in your linked brokerage account, use the Trade Ticket dropdown from the model designer. If you don’t have a linked brokerage account, then you’ll need to manually enter the legs in your brokerage software using the entry plan in the Legs section.

On the other hand, you may require deeper analysis or have other factors to consider before you’re ready to trade. For those scenarios, you will want to send the trade to the book manager. The book manager will support you with the following:

  • You can model this trade against any date in the future with different parameters for exit implied volatility or interest rates.
  • You can add additional option legs from other expiration dates.
  • You can evaluate how the performance of this trade will impact other positions you already hold or are considering in the underlying.
  • You can evaluate how the Greeks for this trade will impact your portfolio-wide Greeks, such as beta-weighted delta and gamma.