Graph Properties

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Options Analysis Properties Dialog Box

The appearance and display parameters can be changed by selecting Graph Properties... from the Action menu.

Alternatively, right mouse click anywhere on the chart and select selecting Graph Properties... from the pop-up menu.

The dialog box has 3 tabbed pages: General, Standard Deviations and Profit Lines.

General

Controls on the General tabbed page adjust general properties related to the Risk Graph.

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Risk Graph Orientation

Choose whether to display the profit scale on the horizontal or vertical axis.

The default is Profit on the horizontal axis, which shows the price chart and the profit chart on the same price scale, with the current price indicated as a horizontal line extending through both price chart and risk graph.

Some traders are more comfortable with the profit levels on the vertical axis, and the risk graphs extending in roughly horizontal directions. Often text books and articles in magazines draw risk graphs with the profit levels on the vertical axis and the strike price levels listed on the horizontal axis. To achieve this more traditional view of risk graphs, select Profit on the vertical axis.

Display Price Targets

A Price Target is a rectangle placed on the price chart of the underlying security using the Price Target Drawing Tool.

Save the price chart to establish a data linkage, then check Show Price Targets on the General tabbed page.

The target area will be displayed in the Risk Graph in the color and at the transparency levels set in this dialog. It will appear at the same price levels as it was originally drawn on the price chart.

For more information on drawing the target on the underlying security's price chart, go to the Price Target Drawing Tool topic.

For more information on linking the price target to the Risk Graph's price axis, go to Show Price Target section of the Using Risk Graphs topic.

Profit Line Legend

priclinlegnd.gifThere is also the option to display the profit line legend in the top left corner of the Risk Graph.

By default, this is not shown.

Choosing this option to display the legend. The Legend is color coded to match the lines on the risk graph, and the number of days until expiry is display.

The days to expiry are automatically calculated by the software, but users can enter settings for each, and can assign different colors to each line in the Profit Lines tabbed page, see below.

Standard Deviations

The Standard Deviations tab lets you adjust how the standard deviations appear on the chart, or if they appear on the chart.

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Show / Hide Standard Deviations

Standard deviations are calculated on the underlying asset's price data and extend above and below the current Last price for the underlying asset at intervals of 0.5.

The standard deviations are based on the number of days to expiry and show the likelihood of the security reaching a certain value by the expiry date. The majority of option strategies will end within the first standard deviation.

Check the Show Standard Deviations check-box to display the bands or bars on the risk graph and price chart.

To hide them, un-check the box.

Display of Bands / Bars

Select either Bands or Bars at the Show as command.

When the risk graph is oriented to the Horizontal (see General settings, above) Bands will extend along the price axis of both the underlying asset's price chart and the risk graph.

When the risk graph's profit scale is oriented to the Vertical, the Bars settings is easier to read as the price levels of the price chart and risk graph are no longer continuous. In this case the bars on the price chart will be arranged up and down the vertical price axis, and will be displayed on the bottom of the chart along the risk graph's price axis.

sdbands.gif

sdbars.gif

Bands with Horizontal Orientation

Bars with Vertical Orientation

Bar Transparency

In order to distinguish between the different standard deviation levels, set the transparency for alternating bands or bars at different levels.

A Zero (0) setting will result in full color and objects behind the band or bar will be blocked out. A setting of 90%-100% transparency may be too light for some colors to be distinguished.

SD Labels

The level of standard deviation is displayed in the bar or band. Each level represents an increase of 0.5. The value of each level is prefixed by sd.

The position of Labels can be adjusted individually for the price chart and risk graph.

Depending the direction of your strategy, it may be easier to view the SD levels justified either to the left or right of the band or bar.

Note - When the risk graph with Bands is oriented with the profit scale on the Vertical axis, Left Justify means top, and Right Justify means bottom.

Profit Lines

Profit Lines graphically show the time value component of an option's price and the effect of time decay. For more information, go to the Profit Lines and Time Decay Analysis section of the Using Risk Graphs topic.

From the Profit Lines tabbed page users can control the display of up to 5 profit lines:

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Default Settings

Any changes to this dialog will become the new default settings.

Display

By default all lines are displayed.

To hide a line, un-check its check box. Its parameters on this dialog will then be disabled.

The line will no longer be plotted on the Risk Graph and its line controller in the middle of the Analysis palette will also be removed.

Style

Two style types are available: Solid or Dots

Solid is the default.

Dots can only be applied to the thinnest weighting, see next.

Weighting

Five line thicknesses are available in the drop-down menu.

Days

The system default is to plot a line for the current day and day of expiry and then plot three other lines at equal intervals between them. The day calculated for each is displayed in the Analysis palette.

When the Days parameter field is empty in this dialog, the system defaults will apply for that line.

As an alternative, users can specify the days from expiry that each line displays. In the above example, Line 1 is set to 30 and Line 2 is set to 15. For these two lines, the new default will be to display Line 1 30 days before expiry and Line 2 15 days before expiry, regardless of how many days are left to expiry. Line 3 will be calculated using the system default.

To return to the system default, delete the entry from the Days field.

Colors

When a single Strategy is displayed on the Risk Graph, its individual Profit Lines will be the colors in the color boxes [assuming that the Use individual line color when not comparing strategies check-box is selected].

When more than one strategy is displayed on the Risk Graph, the color of each strategy will be the color assigned to it in the Analysis palette.

Use individual line color when not comparing strategies

By default, the individual colors shown in the color boxes are used whenever there is only one strategy displayed on the Risk Graph.

Un-check this check box to have individual strategies displayed in shades of the color assigned to each in the Analysis palette.

Compare Strategies at earliest expiry.

Check this check-box to show all the strategies' Profit Lines up to the earliest expiry date of any the strategies.

The earliest expiry date will be used regardless of whether the strategy in which it is found is displayed or not.

Selecting this display will cause the profit lines all of the strategies to be calculated on the same day, i.e. the earliest expiration day of any leg for any of the strategies in the Analysis.

For strategies that do not share the earliest expiry date, their expiration date will be replaced with the a number of days equal to the number of days to expiry until the earliest expiration date and the Profit Lines will be re-plotted accordingly using the price model.

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Color coding the profit table readout

You can display the Strategy Information Box in the same color as indicated for that strategy in the floating Analysis Palette. This makes it easier to monitor the strategy. The color code profit table readout checkbox is active by default. This means that the color selected in the Analysis Palette displays in the Strategy Information Box. In the example below, the Strategy Information Box is color coded to match the 142 day profit line for the displayed strategy.

Drawing Profit Lines Using Natural Volatility

Checking the Draw Profit Lines Using Natural IV checkbox sets the profit lines to natural volatility. If this checkbox is left unchecked, the profit lines are drawn according to the model selected. Once you check this checkbox, it becomes a global setting that remains in effect for all analysis pages.

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