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Using Option Chains

Lesson 2 of 12
Duration 5:25
Level Beginner
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Learn how to quickly access Option Chains using IBKR Desktop, how to configure the workspace to best suit your options trading needs.

Study Notes:

Let’s take a quick look at using Option Chains in IBKR Desktop.

Option Chains may be accessed from the Quote window using the Option Chain tab.

Options for the selected underlying stock are displayed and using the Financial Instrument list to the left of the Option Chains tab, the user may quickly switch from stock to stock. Note, when entering a stock into the input field in the upper left corner of IBKR Desktop, user must select Options before hitting Enter, and then choosing the desired stock. 

Tabbed and List View

By default option chains are displayed in Tabbed View, where you can see options for different expiration date by clicking the tabs along the top of the table. Use the arrows to the left and right of the expiration line to scroll through different dates. The Tabbed view displays call options on the left of the page and put options to the right with Strike prices shown in the center column. 

The user may switch to the List view by locating and clicking the icon to the immediate left of the gear icon. In this view the nearby expiration is fully displayed at the top, while further expirations are shown below and labelled in the column to the left of the screen. Use the blue down arrow to the right of each line to expand and contract the active view. 

Customizing the Display

Just above the tabs you’ll see the option’s underlying with the current price, and then to the right, some selectors you can use to customize your view. 

Choose the put/call display to choose between both types of options or just calls or only puts.   

Use the Strikes dropdown to determine the number of strike levels displayed by either absolute number or using standard deviation away from the underlying price.

Use the destination dropdown to route your order to a specific exchange. Note that the default destination is Smart, which is intended to provide the investor with the highest probability of a fill at the lowest overall cost. 

Strategy Builder

Toggle on the Strategy Builder to build multi-leg option combos. When displayed, the right panel will populate with chosen option legs and name the combination. The panel will provide analytics on the strategy including Performance Profile and Scenario Analysis. Scroll down the panel to view full details. In this example the user builds a short straddle and sees the combo named in the Strategy Builder panel. The user may see Performance Profile and combo break even values below. The user may also quickly convert to a long straddle by reversing direction to the upper right, changing each leg from Sell to Buy. The panel data beneath automatically updates.     

Configuring the Display

Use the gear icon to the upper right of the options chain display to configure Call and Put columns. Option Chains allow you to display up to 10 fields. Inside the configuration tool user will see active selected columns to the left and available columns to the right.

Expand an area and when user clicks an item it will disappear from available and appear on selected columns. To reorder an item, depress and hold the mouse right-click and drag the item to the desired order. Use the minus sign in Selected Columns to remove a field. When you’re done managing Option Chain columns simply close the box and your changes are automatically saved. 

Mirror Feature

To the right of the Strategy Builder toggle you’ll see the “mirror” feature where you can choose to mirror columns in the option chain. The standard layout does not have a mirrored view, rather each column displayed on the calls side, duplicates in same order on the puts side. By selecting mirror from the icon user has two choices: Mirror completely, or mirror except the bid/ask columns.

Entering an Order

The Option Chain window engages rapid order entry. Hovering above the BID price in the option chain makes a red border appear around the active region. 

Hovering above the ASK price in the option chain makes a blue border appear around the active region.

Click the bid price of an option to create a sell order in the Order Entry panel to the right. The order can be switched quickly to a buy order by clicking the Buy Order icon. The order ticket will populate with default quantity, order type and time in force. This can be configured and saved within the Configuration area. The user should take care to adjust quantity and price values as desired before submitting the order by clicking the button.

Use the Advance expansion arrow to the lower right of the order ticket to display an expanded view where additional inputs and algos may be available.  

Resources

IBKR Desktop User Guide

Join The Conversation

If you have a general question, it may already be covered in our FAQs. If you have an account-specific question or concern, please reach out to Client Services.

9 thoughts on “Using Option Chains”

  • Kevin Matwichuk

    Display of existing positions on the option chain should be a high priority feature

  • Dale B. Tingley

    We certainly need better instruction to access and compete Rolling options

  • Anonymous

    how does IBKR calculate Standard Deviation on the Options chain? How can it accessed via IBAPI?

    • Interactive Brokers

      Hello, thank you for reaching out. The standard deviation for the options chain is calculated based on the implied volatility. Specifically:

      The implied volatility is estimated for the 8 options on the 4 closest to market strikes in each expiry.
      These implied volatilities are fit to a parabola as a function of the strike price for each expiry.
      The at-the-market implied volatility for an expiry is the value of the fit parabola at the expected future price.
      A linear interpolation (or extrapolation) of the variance is done based on the squares of the at-market volatilities.
      The standard deviation is then the square root of this estimated variance.
      So in summary, the standard deviation is derived from the implied volatilities of the options prices using a model that fits a curve to the volatilities and interpolates to find the at-the-money volatility.

      Standard Deviation values are not passed via TWS API. Users would need to query strikes using reqSecDefOptParams to receive a list of all strikes and then locally calculate the standard deviations.

      Please reach back out with any more questions. We are here to help!

  • Miguel Maal

    Do I have to pay a subscription for getting the options quotes and being able to negotiate?

    • Interactive Brokers

      Hello, thank you for reaching out and we apologize for the delayed response. Please view this FAQ for instructions to select the correct market data package to see pricing on U.S. stock and index options:
      https://www.ibkr.com/faq?id=35797042

      Please reach back out with any more questions. We are here to help!

  • Anonymous

    Can I do a conditional order example close or open an option position when underlying share prices reaches a certain price?

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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: Options Trading

Options involve risk and are not suitable for all investors. Multiple leg strategies, including spreads, will incur multiple commission charges. For more information read the "Characteristics and Risks of Standardized Options" also known as the options disclosure document (ODD) or visit ibkr.com/occ

Disclosure: Displaying Symbols on Video

Any stock, options or futures symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

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