Strategy Builder

Duration 3:09

Level Beginner

Quickly design and preview multi-legged options combinations orders using IBKR Desktop. Evaluate potential performance profile and view Greeks over the lifetime of the trade.

Study Notes:

Investors may use the Strategy Builder to easily create multi-leg options strategies from within the Option chain. To get started, the user may open the Option Chains from the Quote page.

Locate the Strategy Builder toggle to the right of the option chain selectors. Activate the Strategy Builder by clicking on the toggle.

When activated, the right-side Price Panel with order buttons is replaced by the Strategy Builder interface.

To add legs to your strategy, click the bid (for a sell) or ask (for a buy) at a specific strike price. By default, call options are on the left side of the strike, and put options are on the right. Each leg is added to the Strategy Builder.

User may remove any leg using the minus sign to the right of the leg in the Strategy Builder.

If you create a known strategy, for example a Bull Call or a Calendar spread, the strategy is labeled for convenience.

User may adjust the strategy by changing leg from buy to sell and vice versa. The ratio can be adjusted by typing into the Quantity field. Easily add a stock leg to your strategy using the Add Stock Leg feature.

The combination summary and quote is displayed below, indicating the number of legs, the strategy (if known) and the bid/ midpoint and ask prices. The Order Ticket states the price and shows whether the cost is a credit or debit.

Note the Performance Profile and profit chart below the quote. Depending upon the nature of the combination and number of legs involved, the data displays max loss, max profit and associated breakeven prices. The Performance Profile chart visually displays the trades potential characteristics over a designated price movement for the underlying asset. Use the Max move dropdown to change the data reading displayed on the plot. By default the Profile displays P&L, which is shown here in blue font. The user may alter the profile display through a selection of Greek values by clicking on the label. Note also that the date selector enables the user to view P&L or Greek values on any date through expiration. Scroll down the page to see additional data and news related to the underlying asset.

Once the user has finished adding legs to your order, they click Order Ticket to set up and submit the multi-leg strategy. Here the user may modify any necessary order parameters like order side, quantity, order type etc, before submitting the order.

Disclosure: Interactive Brokers

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Interactive Brokers, its affiliates, or its employees.

Disclosure: Displaying Symbols on Video

Any trading symbols displayed are for illustrative purposes only and are not intended to recommend a particular investment or investment strategy.

Disclosure: Order Types / TWS

The order types available through Interactive Brokers Trader Workstation are designed to help you limit your loss and/or lock in a profit. Market conditions and other factors may affect execution. In general, orders guarantee a fill or guarantee a price, but not both. In extreme market conditions, an order may either be executed at a different price than anticipated or may not be filled in the marketplace.

Disclosure: Margin Trading

Trading on margin is only for sophisticated investors with high risk tolerance. You may lose more than your initial investment. Before trading, read the Disclosure of Risks of Margin Trading, available in the Forms and Disclosures section of your local Interactive Brokers website. For additional information regarding margin loan rates, see the Pricing section of your local Interactive Brokers website.

Disclosure: Options Trading

Options involve risk and are not suitable for all investors. For information on the uses and risks of options read the "Characteristics and Risks of Standardized Options" also known as the options disclosure document (ODD). Multiple leg strategies, including spreads, will incur multiple transaction costs.