Live Data-on-Demand and Trading

Last modified 13:53, 20 Aug 2013

Live Data-on-Demand and Trading

Your SOFTWARE has the ability to analyse trading strategies in real time and then trade these strategies via a linked optionsXpress account. In addition, existing trading positions can be marked to market in real time. This is achieved via the Data on Demand feature within Your SOFTWARE.

This is an extremely important feature for short term traders to analyse trading opportunities during live market hours or for position traders that wish to value their existing trades in real time and see the effects of the position on the risk graph.

A link between Your SOFTWARE and your optionsXpress account must be setup in order for the Live Data and Trading features to work. See the section optionsXpress Brokerage Configuration to establish this link.

Note: The Live Data feed function only works with instruments in the US market and users must have an optionsXpress trading account.

Setting Up a Live Data Feed

All data streamed into Your SOFTWARE is set to Hubb by default.

When live trading options through an optionsXpress account, the data feed streaming into Your SOFTWARE should be set to optionsXpress. This will ensure that the prices seen on all option chain and analysis screens are accurate and streaming from the live optionsXpress data feeds. During actual US market trading hours, this data will be live and can be updated by pressing the green butn_go-off.gif button on all screens with option prices. After hours quotes will reflect the last traded price.

To change the Data Provider, click on to the Edit menu and then select Data Providers. This will launch the Data Providers dialog box.

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On the Data Providers window, find the United States market and make sure it has been checked on. Then under the Data Provider column, click on HUBB to enable the dropdown menu and select optionsXpress from the list of selections.

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Click on the Ok button to apply the changes.

Constructing a Live Trade Strategy

Constructing a Live Trade strategy is the same as constructing a trade strategy using end of day data. The only difference being the data stream for the option chains will come from optionsXpress and reflect the live market prices once the green butn_go-off.gif Data on Demand button is pressed during open market trading hours.

To Construct a trade strategy in Your SOFTWARE, click on Options from the main toolbar and select New Analysis.

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If users are logging in for the first time, an optionsXpress Authentication screen will open asking for the optionsXpress account login details. These are the same details that were provided by OptionsXpress when the account was opened.

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The Username is the optionsXpress Username which is provided by optionsXpress.

The Password is the optionsXpress Password used to log into the optionsXpress website account.

Clicking Ok will enable the live Data on Demand streaming for option chain data.

If the account details entered are wrong, a Login Failure message will be displayed.

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If a login failure occurs, re-enter the Username and Password details. If the login fails again, contact optionsXpress to ensure the provided Username and Password details are correct.

Once successfully logged into the optionsXpress account, the Option Analysis screen will be displayed and live Data on Demand streaming will be enabled. The live Data on Demand streaming will remain active until Your SOFTWARE is closed.

Type in the code for the underlying security being traded and press Enter. This will load all of the options for that security, separated into puts and calls and displayed by strike price and expiry date.

A trading strategy can then be constructed for analysis. See the section Construct Strategies for more details.

For example, a combination trade using Call options is shown below.

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Clicking the green butn_go-off.gif Data on Demand button will stream the live market quotes to the option data table where the Call options will get their new price quotes.

Note the Date and Time highlighted in the top left of the screen. The Time shows that the trade strategy was placed at 9:50:22 AM and the highlighted prices reflect the live market quotes at that time.

Switching to the Graphs tab will display the risk profile of the trade based off the live market prices. Once again, the Time highlighted in the top left corner shows the risk profile reflecting the market prices at 9:50:22 AM.

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The newly constructed trade strategy can now be Saved for future reference or modified for further modelling and analysis.

Valuing a Live Trade Strategy

To value or mark to market trade strategies, click the green butn_go-off.gif button from the Analysis Function Bar.

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This will stream the current live market price during market trading hours or the end of day quote if the market is closed. All trade valuation figures and risk statistics will update and reflect the new market quotes.

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The new Time shows the trade is now valuing at 10:23:50 AM which is displayed in the top left corner of the screen.

The Bid/Ask quotes will reflect the new market prices as highlighted in green and red above. In addition, the Trade Value, Profit/Loss and option Greeks will also be revalued based off the new market prices.

Clicking on the Graphs tab will also show the updated risk graph based off the new market quotes.

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The Time shows the trade is now valuing at 10:23:50 AM.

The Bid/Ask quotes will reflect the new market prices as highlighted in green and red above. In addition, the Forecast, Profit/Loss and option Greeks will also be revalued based off the new market prices.

This feature can also be used to mark to market existing trades to get their current value and risk graph profile.  Simply Open an existing saved trade analysis and enable the live Data on Demand streaming. Then clicking the green butn_go-off.gif button will stream the live price and value the trade accordingly. This can assist traders to exit positions during live market hours when a predetermined price target is hit or get a current market valuation on an existing position.

Trading a Live Trade Strategy

Streaming Data on Demand quotes within Your SOFTWARE is accurate to the live market as provided by optionsXpress. Therefore, any trade strategies analysed using the live Data on Demand function can be sent directly through to the broker platform for trade execution via the Buy or Sell commands.

Single Leg Trades

Single leg option trades consist of either a Call or Put option. These are the simplest types of option strategies and can be traded through Your SOFTWARE. Clicking the green butn_go-off.gif Data on Demand button will update the option chain with the latest market prices which can be used to trade directly into the live market. For example, a live trade may consist of Buying 2 At-The-Money Call options for the current price quote of $28.30. To determine the trade is live, check the Time field which will show a live clock with the hours, minutes and seconds.

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Selecting the active options and right mouse clicking enables the pop-up menu. Then selecting the Buy command will open an Order Entry ticket that is directly linked to the optionsXpress trading account.

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An Order Entry ticket is opened in the Options tab consisting of the Call options and number of Contracts that were in the Options Analysis screen. The Action field defaults to BTO (Buy to Open) as a Buy trade was triggered. If Sell trade was initially triggered, the Action field would default to STO (Sell to Open).

For option trades, the Order Type defaults to Market and the Market $ defaults to the Ask price of the option. In the example above, the default price is set to $28.30. The Expiry defaults to Day Order.

Other Order Types can also be placed into the market, such as the Limit order. For more detailed information, goto the Buy or Sell Using optionsXpress topic.

Clicking on the Submit button will send the trade to the optionsXpress trading platform. If the trade was sent successfully, a message will be returned informing that the order was accepted by optionsXpress and a receipt number will be issued. If the trade was unsuccessful, an error message will be returned explaining the reason why the trade failed to get sent to the optionsXpress trading platform.

Users can double check that orders were sent correctly by opening the Broker Account View within Your SOFTWARE and selecting the specific options trading account to see the order status. Alternatively, users can log into their optionsXpress web trading account and check the Order Status page to see if the trade exists.

Multi Leg Trades or Strategies

Your SOFTWARE allows users to enter any type of multi legged option trade. These can comprise of multiple option legs that form a type of trading strategy. Clicking the green butn_go-off.gif Data on Demand button will update the option chain with the latest market prices to execute the live trade.

For example, a live trade may be performed on a “Straddle” type strategy which consists of Buying 1 Call option and Buying 1 Put option, both with the same expiry and strikes.

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By selecting one of the active options and right mouse clicking to enable the pop-up menu and selecting the Buy command, the software can enter this entire strategy as one order ticket directly to a linked optionsXpress trading account.

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An Order Entry ticket is opened in the Strategies tab consisting of all the Trade Legs and number of Contracts that were in the Options Analysis screen. For multi legged strategies, the Order Type defaults to Market and the Market $ defaults to the Ask price of the first option leg in the strategy. In the example above, the default price is set to $30.20. The Expiry defaults to Day Order.

It is typical to enter orders using the Limit order type when trading multi legged options. A Straddle trade is usually executed at a Net Debit and the price set from the Options Analysis of the strategy can be used as an entry price. The example below shows an entry debit price of $65.95 which was the result of the Options Analysis performed.

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To enter this value in the order ticket, change the Order Type to Limit/Debit and set the Limit/Debit $ to $65.95.

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Then click on the Submit button to send the trade to the optionsXpress trading platform. If the trade was sent successfully, a message will be returned informing that the order was accepted by optionsXpress and a receipt number will be issued.

To double check that the order was sent correctly, users can open the Broker Account View screen or log into their optionsXpress web trading account and check the Order Status page to see if the trade exists.

 

Disclaimer

optionsXpress Australia Pty Limited (ACN 085 258 822 AFS Licence No: 246743) and Charles Schwab & Co., Inc. (Member SIPC) are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Nothing here is an offer or solicitation of securities, products and services by Charles Schwab & Co., Inc. in any jurisdiction where their offer or sale is not qualified or exempt from registration.

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