Option spread trading are strategies which advanced traders have used to limit risk and limit rewards to increase the probability of success. We have outlined several spread strategies through the years which can be found in our webinar archives
I am happy to announce to spread traders we have the added functionality on the OptionsHouse platform to choose the duration – Good till Canceled (GTC) for their multi-leg spread orders.
What this means for you is if you are a credit put spread seller, you can place a closing trade as a GTC order the moment you establish the position and not think about it again. Being disciplined with your exit strategy, to take profits (and cut losses) when your profit or loss targets are met is critical to be a long term successful trader.
For example say you sold the SPY 27 June 192-190 weekly put spread at 50 cents. You could place a GTC order today to close this position at 15 cents – your hypothetical profit target which would realize a 35 cent gain. You don’t have to re-enter this order every day. Additionally with our spread alerts you could set an alert to notify you if your spread price increases to a stop loss point of say 1.00 dollar. You cannot place a stop order on a spread at this point, but being alerted and having the discipline to close trades which have gone against you, is equally important.
Additionally with our advanced order functionality you could actually place an OTO spread order. One order Triggers another Order. The opening spread order which would trigger the closing order both GTC orders. This is kind of a set it and forget it, you always have your spreads working in the market. To learn more about the advance order functionality click here.
At OptionsHouse you can trade up to 4 legs in one spread ticket. Iron Condors, Butterflys, Calendar Spreads can now all be done GTC.
This added functionality allows you to be even more efficient with your trading on the OH platform. Enjoy!
Chief Investment Strategist