Track 'n Trade LIVE Futures
How to Use the Options Tab
In this video, we want to cover the Options tab within Track 'n Trade. You can see here that we have the Options tab selected within the Control Panel. At the very top we have our Mini-Accounting window. This is where we can see at a glance, all of our most pertinent accounting information. Notice that we have blue hyper-link symbols listed within this window, as well. Which can be clicked on for more information.
For example: if we click on the blue dollar sign next to the chart combination Open Profit/Loss. It rotates to display the percent return on margin. If we click it again, it rotates back displaying the dollar amount, once again. Each blue hyperlink provides additional information, for each individual line item.
One line item I want to highlight in more detail is the Portfolio Margin line. We default this line to the maintenance margin. This is what we call the "Look Ahead Margin" since this is the margin amount that will be required if we hold our trade over one trading session to the next. Such as from a day time session into the night-time session. Again, this amount will be what will be required to be in your account, once we switch to a new trading session.
The next line is the usable margin amount. This line is defaulted to the day session margin. Which is the amount you generally enter or exit trades with, during the current trading session, only. When you click the blue text it will switch over and show you the maintenance margin. Click it again, and it will show you the initial usable margin.
Take a look at this next line. You'll notice this line titled "Amount to Exit" is not listed on any of our other trading tabs. That's because this accounting line item is specific to Options. The amount to exit is the amount you must pay to exit a short options position. Or the amount you'll receive, if you're long in Option. Of course, it's the NET amount of the two if you are long and short several Options.
The row titled Cash Balance includes the current amount of liquid cash you have in your account. It also represents any closed profit, or losses you may have accumulated.
The next row listed just below Cash Balance is the Equity Margin Ratio. This is a percentage which is calculated by taking your total account equity, and dividing it by the initial margin of each open contract. Then multiplying it by 100 to get a percentage.
This row is a measure of how much of your account equity is being utilized for open trades. A higher percentage means you're using less of your account equity, and a lower percentage means you're using more of your account equity, for all open positions.
Now, lets talk just a minute about Margin Warnings, and Margin Calls. This is a screen capture of what it look like if your account were to go on Margin Call. This means of course that the only trading you're allowed to do is to close currently open positions. In an effort to reduce your active margin requirement. On the other hand, if you prefer not to close any outstanding positions to correct the margin requirements, you're also able to wire additional funds to your trading account, to remove the margin call lock.
Here's another margin warning, this Low Margin notice is what you'll see if your equity margin ratio drops below 8%.
This Liquidation warning is what you will see if your equity margin ratio drops below 6.5%. Letting you know that are you coming up close to the 5%, which is where the clearing firm may step in and start closing out all or some of your open positions, due to the excessive risk currently in your account.
This Liquidate Now notice is what you will see if your equity margin ration drops below 5%. This notice is letting you know that you should quickly close some of your open positions. Because the clearing firm will soon be stepping in to close some of your positions for you, due to your overly excessive account risk.
The last row in our Mini-Accounting window represents your total account equity. Including any open profits or losses you may currently have.
This Low Margin notice is what you would see if your account equity drops below $900.
Notice the Liquidation warning, this is what you would see if your account equity drops below $750. Letting you know that you are getting close to the $500 level, which is where the clearing firm may step in and start closing out all or some of your open positions, again, due to insufficient funds currently in your account.
The Liquidate Now notice is what you would see if your account equity drops below the clearing firms lowest threshold of $500. This warning lets you know that if you don't close your positions, the clearing firm certainly will. Due to the insufficient amount of money to maintain your account.
This is an additional notice you may see. Notice you have both a low margin warning of your account equity ratio, as well as a liquidation warning, due to low account equity. In this situation- always take the action based on the higher priority notice. Which in this case would be the Liquidation Warning.
Moving on, lets take a look at the very bottom of the Mini-Accounting window. You'll see that we display, for your convenience, the number of long and short contracts per chart. As well as total long and short positions account wide.
Next, you'll see where you enter the quantity for the number of contracts you would like to place with each new order. You can increment the quantity up or down with the spinner arrows here, or you can just click a quick quantity button here. Notice that the default starts with 1 and increments up to quantity 5. These buttons are also user-definable by simply right clicking and changing the amount over here.
Next, we see three radio buttons. This is how you choose which options you would like to see displayed down in our Options Strike Price Table: Puts, Calls, or both. I'll talk about the Options Strike Price Table, in just a moment.
This next set of buttons are used for quickly dragging and dropping the different options order types onto the chart. Also, for quickly exiting all the options order, on either the chart or from your entire book. We're not going to demonstrate the placing of options orders in this video, that's covered in our Options Order Placement video.
The next important window I want to point out is the Options Expiration Date window. This drop-down window allows you to choose the expiration date of the option that expires on the displayed chart. For example: you'll see listed here, all the options with the time remaining until expiration for the E-Mini S&P, which is the current active chart. If I change to a different chart, this drop-down menu will update to display all of the available options on the new chart.
The Interest Rate button is where you can click and fill in the current interest rate that corresponds to the time value remaining on your option. To retrieve a table of the current interest rates, we have a blue hyperlink that takes us to the U.S. Federal Treasury Department. Simply locate the interest rate in the table, closest to the amount of time until expiration, and enter that number here.
You'll notice just below our trading buttons, we have our strike price table. This table includes a number of relevant statistical columns of information when banking your options trading decisions. I'm not going to go into great detail of the content or the use of/or the use of this table. Suffice it to say, that we cover that in greater detail in other videos and training materials.
The last thing I want to show you is that by sliding this window up, we reveal Track 'n Trades full size detailed Accounting window. Over here, on the left side, is where you find the buttons that give you access to your Pending Orders, Open Order, and Closed Orders Tables.
This has been just a quick overview of how to use the Track 'n Trade Live Options Tab.