Did you know?
To help you get the most from the OptionsHouse platform, this series of tips is designed to save you time with handy shortcuts. This installment focuses on our powerful StrategySeek tool.
Tip: Identify winning strategies and trading ideas with StrategySeek
What if you had a tool that could run one million calculations in a fraction of a second? And what if you used it to help you identify and rank winning strategies based on your priorities? With StrategySeek, you can do all that and more. Just enter your forecast and risk priorities, and this powerful tool scans and processes thousands of option strategies in real time. Analyze, alter or trade any suggested strategies
Only available at OptionsHouse, here’s all you can do with StrategySeek:
- Enter forecasts quickly and easily, just the way you want – Input your forecast visually with just one click on a special price chart. Use a target price, a price range, or an outside-price-range parameter, plus you can add or adjust implied volatility anytime.
- See the probable price levels instantly – Once your data is entered, StrategySeek generates a visual of colored bands that indicate probable price levels across time.
- Match a strategy to your risk tolerance – A strategy isn’t right for you unless it aligns with your risk profile. Set your risk priorities and StrategySeek suggests a risk/reward balance. Adjust or disable risk selections at any time.
- Analyze, alter or trade a strategy – use the TradeLab features, such as Snapshot Analysis and Spectral Analysis to evaluate and modify a strategy. Once you’re ready to trade, you can create an order in just one click.
Here is how to access StrategySeek from a quote or position:
- Bring up any Action Menu for a quote or a position by clicking on it.
- Click the Strategy button on the Action Menu.
Or access it right from top navigation:
- Click on Trade in the top navigation.
- Click the Strategy sub-navigation selection.
How to use StrategySeek to enhance your trading
Once you’ve accessed use StrategySeek by following three steps:
- Enter your forecast
- Select and order your Risk Priorities
- Click the “Show Strategies” button
Step 1: Entering a Forecast
StrategySeek features two parts – a historical price chart for the symbol you have entered, which you can configure or draw trends lines, and a future view on the right that enables you to make a forecast.
- If your forecast is outside of the viewable area, you can increase the vertical range using the double down arrow button, or the time horizon with the left-right double arrow button.
- The blue bands represent ranges of probability for the security. You can rollover any point to get a more precise probability value, or expand vertically or horizontally with the arrow buttons.
You may enter one of three forecast types using the Mode drop down:
- Price forecast: Choose a target price and date using the dropdown controls. You may also type any value or drag the control to the spot you want.
- In Range forecast: Create a range of target prices you expect the underlying to hit on a target date, using the controls to adjust the upper price, lower price and the date.
- Outside Range forecast: Select a range of target prices you expect the underlying to be outside a target date – use the controls to adjust the upper price, lower price and the date.
You can also enter a forecast for Volatility. The default is the Current Implied Volatility (IV), but you can use the Implied Volatility dropdown to select another differential value. If you enter a value that is 10 percent higher, it will apply that same increase in implied volatility to every option calculation. Notice that your new volatility forecast changes the probability bands on the chart as well.
Step 2: Select and order your Risk Priorities
StrategySeek lets you order four risk priorities, which you can also turn off if they are not applicable to your investing process.
- Probability – search for strategies that maximize odds of profitability
- Safety – minimize potential losses with lower-risk strategies
- Profit – maximize potential market gains with searches based on your forecast
- Return – maximize potential percentage market gains with strategies based on your forecast
Simply drag, hold and move buttons to the weighted order you’d like, or turn any individual priority off.
Step 3: Click the “Show Strategies” button
Now simply click the Show Strategies button and StrategySeek will scan live market data and perform over 1,000,000 calculations to find and display a series of strategies based on your forecast and risk priorities. Click on any strategy icon on the left for more details.
If you have an existing position in the security, check the box on the top right. If you have more than one, you can choose a strategy. Change your selection by clicking on the underlined starting strategy. You can adjust quantity by clicking on the underlined quantity.
Once you select a strategy, click:
- Analyze to further evaluate in TradeLab
- Edit Strategy to modify the strategy
- Create Order to create an editable Order Ticket
Stay tuned for more “Did you know?” tips in future newsletters!
The above information is provided by OptionsHouse for informational and educational purposes only and is not intended as trading or investment advice or a recommendation that any particular security, transaction, or investment strategy is suitable for any specific person. You are solely responsible for your investment decisions. Commentary and opinions expressed are those of the author/speaker and not necessarily of OptionsHouse. Neither OptionsHouse nor any of its employees, officers, shareholders or affiliated companies guarantee the accuracy of or endorse the views or opinions of guest speakers or commentators. Projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature and are not guarantees of future results. Results may vary with each use and over time. Any examples used that discuss trading profits or losses may not take into account trading commissions or fees.