On the Trader Workstation (TWS) investment platform, you can use a wide range of trading tools. Investors and traders interested in trading options will also find useful tools among them.
In this article, we provide an overview of the best options trading tools that can help you trade successfully. We will discuss the following five trading tools in detail: OptionTrader, Probability Lab, ComboTrader, Risk Navigator and Option Strategy Lab.
Options trading tools
The Trader Workstation (TWS) platform is perfect for active investors and traders. It is an advanced trading platform, offering over 60 types of trading orders and a huge variety of trading instruments.
The TWS trading platform offers a range of trading tools and algorithms that allow you to optimize your investment strategies, trade faster, and in-depth analysis. Below, we’ll cover the top five options trading tools.
OptionTrader: A comprehensive overview of option prices
The trading tools available on the platform should make it easier for investors to trade on the stock exchange. In OptionTrader, you can easily view the selected options along with their bid and ask prices. You get a clear overview of all the current prices of the selected option in the market. Additionally, a graph and implied volatility are displayed. Thanks to this comprehensive information, you can effectively choose attractive options for your investment portfolio.
In OptionTrader, you can create a buy order by clicking on the ask price or a sell order by clicking on the bid price. After creating the order, you can change the quantity, type and validity time of the order, and then send it for execution. You can also create an order based on implied volatility.
Probability Lab: Trading options based on probability
Probability Lab is one of the options tools that offers a practical and vivid way to work with options without having to think about complicated math. With this trading tool, you can analyze the probability distribution and determine which combination of options best fits your trading strategy.
Above you can see the probability distribution of Apple stock options for the August expiry date. This distribution is based on option prices. For example, the chart shows that the probability that an option below $ 150 per share will expire is 57.15 percent. The probability that Apple will be trading above $ 180 in August is only 1.24%. (100-98.76 = 2.26).
ComboTrader: Easily create option combinations
Did you know that you can trade complex option combinations with just one click via the TWS trading platform? Option exchanges (eg Euronext) offer the so-called spread book. This means that you can trade combinations of options directly. Thanks to the ComboTrader tool, you can take a position in a single order, e.g. in a vertical spread, butterfly, straddle or iron condor.
The great advantage of a combination order is that you don’t have to enter a separate buy and sell order for each leg of the combination. You can add a trade to a combination and see how the bid and ask prices automatically change for the entire combo. Through LYNX you get the opportunity to trade on the TWS platform and use all the investment tools we talk about in this article and many others.
Risk navigator is a helpful tool when you want to get an overview of the risk of open positions in your portfolio. Here you can display delta, gamma, vega and theta values and additionally the result of an open position at a certain price of the underlying asset.
Your account information will appear at the top of the window. The photo below shows what items make up an example portfolio and what are the prices of each option. The All Underlyings row displays details about your items. You can see that for this combination of options, the Greek coefficients are: delta -35, gamma 2, vega 0 and theta 0, respectively.
The chart shows the profit and loss at the option expiry date in August. The x axis shows the price and the y axis shows the profit / loss. This way you can see the exact result of your investment at different price levels.
Option Strategy Lab: Tool for creating option strategies
Option Strategy Lab is one of the most advanced option tools. It allows you to easily create more complex combinations of options. The system suggests option strategies based on specific price or volatility expectations.
You can compare the results according to various characteristics such as expected profit, Sharpe’s ratio and profit probability. You can also filter the results by premium, delta, strike price and expiration date. For each strategy, you can then see the profit and loss potential and the risk-reward ratio.
Trade options with LYNX
Whether you are a day trader or a long-term trader, you can take advantage of the excellent offer of LYNX as we enable you to trade a wide variety of financial instruments such as stocks, ETFs, futures, options, CFDs and forex at favorable commissions. In addition, we regularly publish training webinars. At LYNX, you can trade in real time through professional trading platforms.
In addition, as part of the Investment Portal, we regularly inform you about current investment opportunities on the market and news from the investment world. In case of any doubts, you can use our customer support for free.
Sources used in the article:
BLEKEMOLEN, J. De beste optietools om succesvol opties te verhandelen. LYNX [online]. Published on 16/06/2022 [cit. 12. 7. 2022]. Available at: https://www.lynx.nl/beurs/beurs-koersen/opties/optiehandel/beste-optietools-succesvol-opties-verhandelen/
Make money from falling prices
The stock market doesn’t always go up. There are often times of increased volatility and falling prices. In addition to buying stocks, an investment account via LYNX will also allow you to speculate on declines and open short positions (short selling). Find out more on our website: Short Sale
Displaying the — greyhound
Displaying today’s chart