How To Sell Options On Tastyworks – (If you have any problems viewing the video in full screen, click the YouTube logo to the left of the full screen button, the “Watch on youtube.com” button, or click here).
Are you trying to analyze your positions by having a visual representation instead of crunching numbers in your head? If so, welcome to Analysis Mode on TasteTrade Desktop Platform. Here, you can analyze your existing positions in your portfolio or any business idea before you launch it.
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To access the Analysis mode, navigate to the Trading tab. To use the Analysis mode, click on the Trade tab located between the Watch List column and the Tab window. Once inside the trading tab, click “Curve” and then “Analyze” to enter analysis mode. Analysis mode can be turned on or off by clicking the Analysis button.
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Throughout this article, we will use the 30∆ SPY January Monthly Expiration Strangle as an example to demonstrate the features of the analysis method.
There’s a lot to look at when using Analysis Mode, which is why we’ve broken it down for you. We work from the bottom up.
P/L THEO – Theoretical Profit/Loss Line shows the theoretical profit and loss of a position based on any variables (if applicable) in the Analysis Control tab. This line can change shape depending on the applied variables. This metric is great when looking into the future or applying any variable in the analysis controls. P/L Theo is an analysis tool and may not directly reflect your P/L.
P/L EXP – The Closing Profit/Loss line shows the expected profit or loss from the closing position. This line is fixed. A break-even point is shown when this line meets the zero line.
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Greek Dropdown Menu – Displays the change in delta, gamma, theta, vega, or rho based on any variable (if applicable) in the analysis control window. The slope of this line varies depending on the variables applied.
Analysis – The analysis clock curve is based on any variable (if applicable) in the analysis control window. This bell curve widens if volatility increases and narrows if volatility decreases. Standard deviation curves are also adjusted according to the variables applied in the assay control.
Theo – Theoretical Profit/Loss Zone shows profit or loss based on any variable (if applicable) in the Analysis Control tab. For example, if volatility increases, a sold 30∆ short neck shows a red zone of theoretical loss below the zero line. On the other hand, if volatility has fallen, the green theoretical profit zone appears above the zero line.
Using the up or down arrow will increase the y-axis. It helps to show the P/L line more prominently than the zero line. The y-axis scale cannot be locked unless price locking is enabled on the order ticket. To read more about green pricing, please click here.
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References – Selecting this button allows you to view the offer and ask questions about the currently selected options. Bid prices are shown below the zero line and ask prices are found above the zero line.
Info – When enabled this displays a cursor menu based on where your cursor is along the curve. The cursor menu displays the option’s expiration date, strike price, profit/loss at expiration, theoretical profit/loss, and theoretical Greek value. Theoretical data is based on the variables entered in the Analysis Control tab.
A theoretical Greek bar, located at the bottom of the analysis mode curve. Your selection is based on the Greek metric selected in the View Options.
The values displayed at the top and bottom of the analysis curve give you a quick look at your theoretical deltas and profit/loss closures based on price movement.
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When using the Analysis mode, the analysis curve analyzes the contents of the order ticket. You can also customize the legs you want to analyze in the Analysis Controls tab described in the next section. For example, if you are analyzing an iron condom, but want to evaluate the call side, select the put side in the analysis controls.
Analysis controls are on the right sidebar. To access the right sidebar, click the tab in the upper right corner of the platform. The Analysis tab is second from the top.
When positions are matched in the Analysis Selection Controls area, a checkbox immediately appears to the left of each position. A checked checkbox indicates analyzing the site. Additionally, the checkbox above shows all selected positions. You can toggle the site(s) you want analyzed by checking (on) or unchecking (unchecked) each box.
Additionally, you can view different column metrics by clicking the ‘>’ arrow to view other column pages. Columns labeled ‘Theo’ depend on the variables entered in the Analysis Control tab.
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*For all your math options, theoretical metrics are based on the Black School Option Pricing model. Looking at theoretical metrics today, it can be measured for a “fair price” based on our options pricing model. Theoretical metrics are ideal when looking into futures and determining the implications of a position based on time, price and volatility.
“Current Evaluation” allows you to visualize and analyze the effects of time decay. By default, Effective Days to Expiry, or “Eff DTE,” is the expiration date of the site being analyzed.
The “Theo Spot Price” feature allows you to analyze and view site results by adjusting the base price to see the effects of the analyzed site’s price action. To see the effects of price action, click the checkbox to the left of “Enable”.
Finally, the implied volatility close allows you to analyze and evaluate the situation in terms of volatility changes. Here, positions show population options in an area of analytical option controls so that volatility metrics can be adjusted for analytical purposes. You can analyze the effects of expanding volatility by adding percentages or falling volatility by subtracting from a position. Statistics can be adjusted using the up or down arrows next to the volatility percentage, or entered manually by double-clicking the number. Volatility figures can be reset by clicking the “Reset” button on the right.
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Additionally when analyzing your position or trade, check the per contract IVs box to see the actual volatility of each strike instead of the absolute expiration volatility. You’d think SPY would continue at a higher level. You want to take a bullish stance. You have decided that a vertical short spread is the way to go.
All you have to do is go to the “Trading” tab, and when you’re in “Table” mode you’ll see option chains.
For clarity, monthly options are annotated in bold white text. You can see that weekly and quarterly option cycles have an orange “W” or “Q” next to them.
30-60 days before expiration is the monthly cycle we want to take the trade. You can see April 20
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There are a few different ways to do it. You can put it together by clicking on bid and ask.
Remember, on the put side, in the money options are below the orange line. Options are out of the money above the orange line.
Let’s say we want to sell at a strike of 275. We want to buy the strike five points away, which is 270.
To buy it, all you have to do is click on Ask for Strike 270. A red outline and an “S1” label indicate that you are selling.
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You can look at your statistics below to see that your probability of profit (POP) is 59% and your probability of making 50% (P50) is 82%.
If you’ve recently cleaned up your site, another way you can set a smaller vertical is to use the “Strategy” drop down menu. Make sure the menu is toggled to “Cut” and “Add”. Make sure and select the “Vertical” option from the dropdown. Then, just click “Go”, and the business will appear on the platform.
It will populate automatically; However, and we want to accommodate those strikes. We have a 275 and a 270, so we can pull them anywhere. That’s easy. You can see that the trading figures below are the same. When you’re ready to go, click “Review and Send” to send the trade to your broker for filling.
Or if you’re like me and you’re a visual trader, I like to open the “Curve” mode. Make sure “Analysis” is also selected. This approach gives you a visual representation of the business.
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When you move your cursor over the green area you can see at the top, there is a small flag that shows your profit and loss when you expire (the same
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