Options Overview
Provide your students with an overview of options.
Assignment
Use our educational resources to learn about options.
Option Orders
Students can learn about trading options by placing options orders.
Assignment
Submit an option trade using a volatility order.
Strategy Builder
Instruct your students to use the Strategy Builder in Mosaic to quickly build options combo orders directly from the option chain display.
Assignment
Build options combo orders directly from the option chain display.
OptionTrader
OptionTrader is a robust trading tool in TWS that lets you view and trade options on an underlying. Instruct your students to use OptionTrader to perform the tasks listed.
Assignment
- Load option chains
- Establish straddles on historically volatile stocks
- Create and manage options orders
Option Strategy Lab
Instruct your students to create and submit simple and complex multi-leg option orders that are based on a price or volatility forecast using the Option Strategy Lab.
Assignment
- Enter your own price or volatility forecast on an underlying to generate a list of strategies.
- Filter results by premium, delta, strike and/or expiry.
- For each strategy, see the potential profit and loss and risk/return ratio in the scanner results.
Volatility Lab
The Volatility Lab is a comprehensive toolkit of nine volatility tools designed to help traders uncover superior trading opportunities. Instruct your students to use the Volatility Lab to perform the tasks listed below.
Assignment
- Gauge and view what the option market is projecting for a stock's future direction based upon its historical movement.
- View at a glance call and put open interest across available expirations to see where traders are positioned.
Probability Lab
The Probability Lab was created by Mr. Thomas Peterffy, founder of Interactive Brokers. It offers a practical way to think about options without the complicated mathematics, and is designed to optimize the analysis and management of option strategies. Instruct your students to perform the tasks listed below.
Assignment
Review the following concepts:
- Probability distribution (PD)
- The nature of stock prices
- Calculate the PD from option prices and vice versa
- PD implied by the market and your opinion
- The best trades and potential consequences
Options Portfolio
Use the TWS Option Portfolio tool to help students adjust the risk profile of your portfolio by any of the Greek risk dimensions. Instruct your students to perform the tasks listed below.
Assignment
Find the most cost-effective way to achieve your objective in Delta, Gamma, Vega or Theta by describing your objective and specifying any conditions.
Resources
Documentation
Additional Reference Material
Market Scanner - Options
Instruct your students to use the TWS Market Scanners to quickly and easily scan markets for the top performing options contracts.
Assignment
- Scan multiple products.
- Scan for top contracts on US options.
- Choose from popular scan parameters.
- Create custom scans - Variables, filters and parameters allow you to create unique, completely customized scans.
Trading Options on Margin
Instruct your students to familiarize themselves with our margin requirements for options and how to monitor the margin requirements for their own accounts.
Assignment
Learning About Margin
Learn the basics of trading options on margin.
Monitor Margin Requirements
TWS Users' Guide
US Options Commissions
Instruct your students to familiarize themselves with our options commissions.
Assignment
Encourage your students to review IB's option commissions and other pertinent pricing information.
Resources
Additional Reference Material
Assignment
Provide this material as background for your students.