Track 'n Trade LIVE Futures

How to Place Options Orders Drag-n-Drop

Video Transcript

In this video, we're going to start a multi-part series on options within Track and Trade. We're going to start in the control panel, in the options tab. At the top, we have the mini accounting window. The next section is for the drag-and-drop orders. The next section down is for the multi-leg option orders, and then the bottom section is telling us which options we have placed on the screen or in the order calculator.

The first thing I want to do is just give an example of a simple buy call drag-and-drop option order. If we want to buy a call on the S&P 500, the first thing we need to do is select the number of days until expiration. So, we drop down, and you'll see a number of different opportunities in here. I like to go with the quarterlies. You'll see the quarterlies are set up with the darker image; they've been bolded. So, the first one is 6 days out, or we can slide down to the next quarterly—there it is at 37 days out. We're going to simply buy a call with 37 days till expiration.

We simply click on the buy call button, and it drags the marker onto the screen. You'll notice as I drag my mouse up and down the screen, it jumps to each individual strike price. The reason this is important is that you want to be able to line this up with either at-the-money, out-of-the-money, or in-the-money options, but you also want to know where they're at in relation to the underlying trend of the market. We're on a five-minute chart at this point, but you can see as I drag the option up and down on the screen, it jumps to different strike prices.

Now, if we come in and drop it, all I have to do to place it on the screen at one of these chosen strike prices is left-click. You'll notice that it places the order into the screen or into the first options table. Imagine this box as your order ticket—this is what we're going to send into the exchange. We haven't sent it into the exchange yet; we're still figuring out what we want to do and what we want to calculate.

You'll notice that when you drag and drop an option onto the screen, Track and Trade gives you the information necessary at that option strike price. So, you see the volume is 21, the open interest is 1,500, the bid is 73.25, and the ask is 73.75. You'll notice that we're modifying the C4580 call—this is the OEW Q23, which of course is the S&P 500. This is the mini, and it is the September contract, so that's what that means, that's your symbol. We're going to buy one call with an expiration of 37 days, and that's what it's telling us on this piece of text. Over here on the other end of the line, you can see the theoretical value. This is the theoretical Black-Scholes value, telling you what the option is theoretically worth. It's worth $4,143, and we're going to pay $3,687. So, in essence, we're getting it for a bit of a bargain. It's theoretically valued at $4,000, but we're going to buy it for $3,700—about a $300–$400 discount.

That's what it's telling us on the line. Now, of course, this information is all customizable. You can have it tell you what information you want. If there's too much information, you can take some away by simply right-clicking on the triangle and selecting "Preferences." This will bring you to the preferences of the order line, and you can decide what information you would like to have displayed.

Coming back to the options tab, when we're ready to place the option, all we have to do is slide this up a little closer to the marker. We'll bring it up to an at-the-money option—this is a little too high, so we'll place it just in the money right here. You can see that we've got that set to place it to the market. We can either bid for it with a limit order or come in and bid for it. Let's say we want to bid for it. Notice that the bid, mid, and ask are right here in the control panel. The option is automatically set to the mid at the point of dropping it. When we dropped it, it was at 68.75—the midpoint. We can go ahead and offer that to the market. They're asking 68.75, we're bidding, and the low of the bid is 68.25. We're going to offer 68.75, but let's come down and offer the midpoint at 68.50. When we place that into the market, you'll notice that the little marker down here turns black. That means it's not filled. If it turns blue, it will be filled with a long call; if it turns purple, it will be filled with a long short.

Now it just got filled—you'll notice that they accepted our offer, and it's now blue. If you come down into the accounting tab, you can see your positions listed out. Our total gain at this point—the spread on this market was about $12, so we're down a little under the market as it moves through price and time between the bid and the ask.

That's how you place an options order in Track and Trade with a simple drag-and-drop call option. You can do the same thing, of course, with a buy put, sell call, or sell put. Now, to liquidate the option, very simply, we can come down, right-click on the option in the control panel, and select "Liquidate Option." Or we can right-click on the triangle on the screen and select "Liquidate Option." Once we do that, you'll notice that it populates the control panel, and the order ticket is now ready to liquidate the position. So, we can either bid for it, or we can click "Market Order," and we're out at the bid price.