Snapshot_Analysis

What does this do?

Snapshot Analysis allows you to view risk and reward characteristics for any option strategy or option position. Snapshot Analysis is part of the tradeLAB™ set of tools. In one click, you will be able to see key properties of your strategy including the Maximum Profit, Maximum Loss and Probability of Any Profit.

How to Access Snapshot Analysis:

  • Bring up any of the following windows for an option strategy (could be a spread or single option): A quote or position Action Menu, the spreadMAKER™, an Order Ticket or the adjustTRADE™ window.
  • Click the ANALYZE in tradeLAB button on the lower left side of the window you just brought up.
  • The tradeLAB™ window will appear. The Snapshot Analysis tab will be selected by default.

Explanation of the Data and Controls

1. Snapshot Analysis Tab – This tab is selected by default when you click the ANALYZE in tradeLAB button on an Action Menu, the spreadMAKER™, an Order Ticket or the adjustTRADE™ window.

2. Spectral Analysis™ Tab – Click this tab to select Spectral Analysis from the tradeLAB™ set of tools.

3. Display Button– Click to view display options for the Risk Profile Chart. You can then add/remove any of the available fields as desired:

  • Expiration profile – Click the view or review the expiry plot on the risk profile chart.
  • Current profile – Click to view the current calendar risk profile chart.
  • Custom profile – Click to view the calendar risk profile chart on a specific number of days prior to expiration of choice.
  • U/L Price – Click to view the underlying price of the security on the risk profile chart.
  • Standard Deviation – Click to view lines displaying the width of an entered amount of standard deviations away from the current price.
  • % Probability – Click to view a line grouping that displays the width of an entered amount of standard deviations away from the current price.

Display

4. Edit Price for Analysis – You may edit the price of the strategy by clicking it. If you own the strategy, you are editing the cost basis for doing analysis. If the strategy is not owned, you are editing the potential acquisition price for the purpose of doing analysis.

5. Help Icon – click to get the launcher for tradeLAB™ help articles.

6. Underlying Quote – Real-time quote for the underlying instrument for the strategy being analyzed.

7. Strategy Drop Down – This drop down appears if you are analyzing a strategy for an underlying in which you already hold a position. The position you own is your starting strategy. You may choose to analyze your starting strategy, the adjustment you are considering or the strategy as it will appear after you make the adjustment, which is called the adjusted strategy.

Snapshot_Adjust

8. Expand button – Click this button to expand the risk profile graph.

9. Increase Viewable Range Button – Click this button to expand the viewable range both on the left and right side by 25%.

10. Reduce Viewable Range Button – Click this button to reduce the viewable range both on the left and right side by 25%.

11. Pan Viewable Range Right Button – Click this button to move the chart 25% of the current viewable range to the right.

12. Pan Viewable Range Left Button – Click this button to move the chart 25% of the current viewable range to the left.

13. Create Order Button – Click to create an order ticket for the strategy. When you have the choice of analyzing the starting position, adjustment and adjusted strategy. Note that the Create Order button will always populate the adjustment into the order ticket.

14. Risk Profile at Expiration – The risk profile as it appears on the day the strategy expires. The risk profile at expiration maps the market gain of the strategy at expiration to a range of underlying prices. The vertical axis shows the market gain of the strategy, while the horizontal axis displays the range of underlying prices.

RiskProfile3

15. Starting Strategy Risk Profile – The risk profile with the starting strategy. The vertical axis displays the market gain of the strategy, while the horizontal axis displays the range of underlying prices

16. Compare with Starting Strategy – If you are adjusting your strategy, you can overlay the starting strategy on the graph. Simply click the Compare with Starting Strategy check box and you will see your starting strategy overlaid with a pink or light green line on the chart.

RiskProfile2

17. Next Earnings – The estimated date of the next earnings announcement and whether it occurs before or after expiration of the strategy.

18. Chart Button – Click this button to open a pop-up window that displays a chart of the symbol or strategy that is currently being analyzed.

19. Edit Strategy Button – Click to edit the strategy (when you have the choice of analyzing the starting position, adjustment and adjusted strategy note that the Edit Strategy button will always edit the adjustment). This button invokes the spreadMAKER™ tool from which you have the ability to edit legs, delete legs or add new legs. When you are done editing the strategy, you can click the ANALYZE in tradeLAB button on the spreadMAKER™ window to perform analysis on the new strategy.

20. Next Dividend – The estimated date of the next dividend for a stock that pays a dividend.

21. Expiration – For a strategy with one or more options that all have the same expiration date, that date is the expiration for the strategy. For a strategy with options that have different expiration dates, the strategy expires when the nearest month option in the strategy expires.

22. Risk Reward – The ratio of the maximum loss to the maximum gain. For example, a risk/reward ratio of “1 to 0.49” would mean you are risking a dollar for a potential market gain of forty-nine cents.

riskreward

23. Probability for Any Profit – The probability that the underlying, at expiration, is anywhere in a range that yields a positive market gain. Probability is calculated using the current implied volatility as a forecast for the future movement of the underlying.

24. Break Even – The theoretical underlying value or values at expiration where the theoretical market gain of the strategy is zero. Note that this calculation does not take into account dividend or exercise risk.

25. Probability for Maximum Loss – The probability that the underlying, at expiration, is anywhere in a range that yields the maximum market loss for the strategy. Probability is calculated using the current implied volatility as a forecast for the future movement of the underlying.

26. Maximum Loss – The probability that the underlying, at expiration, is anywhere in a range that yields the maximum market gain for the strategy. Probability is calculated using the current implied volatility as a forecast for the future movement of the underlying.

27. Probability for Maximum Profit – The probability that the underlying, at expiration, is anywhere in a range that yields the maximum market gain for the strategy. Probability is calculated using the current implied volatility as a forecast for the future movement of the underlying.

28. Maximum Profit – An estimate of the most you can make from the strategy. It is the maximum theoretical market gain the strategy can have at expiration. Note that this calculation does not take into account dividend or exercise risk.

profit_profile

29. Expander Icon – click to reveal the instruments for a multi-leg strategy (expander does not appear for single leg strategies). Selecting the by leg option automatically expands your strategy so that all legs of a multiple strategy are visible. You can then edit/ adjust any of the available fields as desired:

  • IV Forecast box – the IV Forecast default is the current IV for each leg. Changing the value automatically changes Chg and % Chg fields.
  • Chg box – the Chg box is IV Forecast minus Current IV for that leg. The default amount is zero. Changing the value automatically changes IV Forecast and %Chg fields
  • % Chg box – the % Chg box is Chg divided by Current IV for that leg. The default amount is zero . Changing the value automatically changes IV Forecast and Chg fields.

Please see help for Spectral Analysis for more details for how leg-by-leg analysis operates