Handbook FXFlat FX Options

Transcription

1 Handbook FXFlat FX Options

2 FXFlat Trading FX Options When you open an FX options account at FXFlat, you can trade options on currency pairs 24- hours a day, 5.5 days per week. The FX options features in FlatTrader help traders choose which options best fit their trading style and market outlook. To access the FX options functionality in FlatTrader, you ll need to sign up for an account. For more information, contact a FXFlat account executive. This guide assumes that you are familiar with trading FX options. If you re new to FX options or simply want to brush up on your options knowledge, see FXFlat s FX Options in FlatTrader: A Quick Reference Guide for more information. Loading FX Options Layout If you are trading solely on FX options, FXFlat has created two specific layouts for FlatTrader users. FXO1 Layout is for anyone trading on a computer that has a single monitor. FXO2 Layout is for anyone trading a machine that is attached to multiple monitors. For more information on how to select a different layout, see the chapter Displaying a Layout in the User Manuel Dealbook 360. Opening the FX Options Quote Board When FlatTrader is open, you can start trading options by clicking the View menu and selecting the Option Board. This displays the FX Options Quote Board which displays a number of strike prices and expiration dates for the selected currency pair. Handbuch FXFlat Trading FX Options Seite 2

3 When you first open the FX Options Quote Board, a currency pair is automatically selected in the Underlying Market drop-down menu. You can change the displayed currency pair by clicking and selecting one from the drop-down menu. Once selected, you can see the current market price for that currency pair in the Underlying bar. This appears at the top of the FX Options Quote Board and displays the pricing information of the selected currency pair as well as your current margin and floating P/L. Below that, you can view a list of expiry dates for that currency pair. When you open a forex position in the selected currency pair, the Underlying bar changes colours, depending on whether the market is higher or lower than your entry point and whether you have a positive or negative P/L. You can place a forex market order by clicking on the price in the Bid or Ask columns. This opens the New Order window for placing forex trades. Once the currency pair that you want is selected, the FX Options Quote Board displays a list of option expiry dates for that currency pair. When you click next to the expiration date you want, FlatTrader displays an option chain, which displays several strike prices, the implied volatility and Delta for a particular strike, and the bid and ask prices for call or put options for each strike. To hide the displayed option chain, click. You can also display all available option chains by right-clicking in the FX Options Quote Board and selecting Expand All from the drop-down menu. To hide all option chains, rightclick in the FX Options Quote Board and select Collapse All from the drop-down menu. Handbuch FXFlat Trading FX Options Seite 3

4 Viewing the Option Chain Once you display the FX option chain for a particular currency pair, you can view strike prices, the implied volatility, the Delta for a particular option, and the bid and ask prices for call or put options for each strike. The Option Board is divided into two sections. The Calls section displays the bid and asks prices to trade a call while the Puts section displays the bid and ask prices to trade a put. Values in green text mean the last movement of the market was higher, while values in red text mean the last movement of the market was lower. The highlighted row shows which strike price is at-the-money. The Strikes column in the middle shows the price at which you exercise the option; the strike is the specific price in the option contract that your forex position would be opened at on the expiry if your option had value. You can use the Strikes field to increase or reduce the number of strikes you see. To see all available strikes, click the Show All checkbox. You can customise the appearance of the FX Option Quote Board by right-clicking on it and selecting Configure... from the drop-down menu. You can then use the Configure Option Quote Board window to display additional columns in the Underlying Markets row or Option Chain table, change the colours or font styles, or select the pricing convention you want to see in the window. Handbuch FXFlat Trading FX Options Seite 4

5 Filtering the Option Chain You can determine which expiry dates or strike prices appear in the FX Options Quote Board by clicking the Filter Expiry Dates. This opens the Option Board Filter window. You can also open the Option Board Filter window by right-clicking in the FX Options Quote Board and selecting Filter... from the drop-down menu. The Option Board Filter window contains two tabs. On the Expirations tab, you can choose the expiration dates that you want to view by clicking the checkbox next to the date. You can use the Select All or Select None buttons on the right side of the Choose Expirations section to simplify your selection process. In the Select Format section, you can select the way you want to view the dates (DD.MM.YYYY or MM.DD.YYYY). If you want to view how many days are left on an option in the FX Option Quote Board, you can check the Add Days Left checkbox. On the Strike tab, you can choose the strikes that you want to view by clicking the checkbox next to the price. You can use the Select All or Select None buttons on the right side of the Choose Strikes section to simplify the selection process. Handbuch FXFlat Trading FX Options Seite 5

6 In the Maximum Number of Strikes to Display section, you can use to set a limit to the number of strikes that appear in the FX Option Quote Board. You can select up to 500 strikes. If you want to view the at-the-money or ATM line in the FX Option Quote Board, you can check the Display ATM Line checkbox. You can implement your changes in the FX Options Quote Board and close the Option Board Filter window by clicking Apply. Placing an Option Order When you re ready to place an option order, you can double-click on the Bid or Ask price under the Call or Put section in the FX Options Quote Board. This opens the FX Options New Order window. You can also open the FX Option New Order window by right-clicking in the FX Options Quote Board, selecting New Order and then choosing the order type (Vertical, Straddle, Strangle, Risk Reversal or Single Vanilla) you want from the drop-down menu. This opens the New Order window with the strategy set up. Like the New Order window that you use to place currency pair orders, the FX Options New Order window contains a variety of tools to help you place your options trade. Handbuch FXFlat Trading FX Options Seite 6

7 The Order drop-down menu is where you can select one of the available option order strategies. We ll discuss how each one of these strategies work in a moment. The currency pair display shows the real-time prices and market direction for the selected currency pair. If you want to view the Price Activity window or the chart window for the currency pair, right-click on the currency pair display and select Price Activity or Open Chart from the drop-down menu. The price table displays the strategy price of the option. When you first open the FX Option New Order window, the strategy price displays the price in pips by the terms currency. You can change the price display of the order by right- clicking on the prices in the price table and selecting the option you want from the drop-down menu. You can hide the price table by right-clicking on the currency pair display and unchecking Display Price Table. In the Option Strategy section, you can select the account you want, the currency pair, the order type and whether the option order is a buy or sell. FlatTrader will automatically set the premium. If you select Stop or Limit in the Order Type drop-down menu, you can set you own price in the Order Price field. The Strategy Settings section contains six tabs. Handbuch FXFlat Trading FX Options Seite 7

8 The Legs tab displays the number of legs required to execute the selected strategy. You can specify the operation, number of lots, the expiration date and the option type for each leg, depending on the strategy. You can view pricing information for each leg in the Pricing Details section. If you would like to Delta hedge your option trade, you can click the Hedge checkbox. When this is checked, FlatTrader will issue a market order to buy or sell the currency pair in the amount that offsets the Delta exposure from the option order. The Duration tab displays how long your order will be working. All option orders will be considered Cancelled; this means your order will remain working until you decide to cancel it or it is filled. The Greeks tab shows the values for the Greeks (Delta, Gamma, Theta, Vega and Rho). You can choose to display Greek values by the base or terms currency or in a percentage of the base currency by using the Display Greeks drop-down menu. The Terms tab displays the lot size, settlement type, and expiration date and time for the trade. Handbuch FXFlat Trading FX Options Seite 8

9 The About Strategy tab displays information about the type of strategy you selected. You can view how it is structured, the directional view, and the possible risk/reward. The Analysis tab summarises the cost, the maximum profit and loss and what the breakeven price would be for your option. At the bottom of the window, you can click to display the Order Form Settings. To view the whole price of the underlying currency pair, leave the Display Handle checkbox checked; uncheck it to only see the last two numbers in the ticket. Check the Close When Finished checkbox to close the FX Options New Order window after you place your order. If you frequently place one type of option trade, you can click the Save link in the upper right corner of the FX Options New Order window to make your settings appear every time you place an option trade. When done, click Submit to place your option order. A confirmation window will appear that displays the details of your trade and analysis information. Handbuch FXFlat Trading FX Options Seite 9

10 Once you click Yes, your option orders will appear in the Working Orders window or as an option position in the Open Positions window. Placing a Single Vanilla Option Order When you want to place a simple call or put order, you would select Single Vanilla from the Order drop-down menu. This is the most basic type of option order. Handbuch FXFlat Trading FX Options Seite 10

11 Placing a Single Vanilla Option Order: 1. Select Option Board from the View menu. 2. Make sure the currency pair you want is selected. To change it, click and select one from the Underlying Market drop-down menu. 3. Click next to the option expiry date to expand the option chain. 4. Double-click on the price in the Bid or Ask column under the Call or Put section. 5. In the FX Option New Order window, make sure Single Vanilla is selected from the Order drop-down menu. 6. Check the settings in the FX Option Strategy section. If desired, click under the Account, Symbol, Order Type or Operation drop-down menu and change the settings. 7. In the Strategy Settings section, adjust the number in the Lots field on the Legs tab. If desired, you can also click and change the settings. under the Date, Strike or Option Type drop-down menu 8. If desired, click the Duration, Greeks, Terms, About Strategy and Analysis tabs to view other details about the order. 9. When done, click Submit to place your option order. A confirmation window will appear that displays the details of your order. 10. Click Yes to confirm the order. Placing a Vertical Option Order When you select Vertical from the Order drop-down menu, the FX Option New Order window displays settings so you can open a long and a short call or put on the same currency pair. This is called a multi-leg order and each option would be considered a leg. Both option legs have the same expiry, but different strike prices. Handbuch FXFlat Trading FX Options Seite 11

12 Placing a Vertical Option Order: 1. Select Option Board from the View menu. 2. Make sure the currency pair you want is selected. To change it, click and select one from the Underlying Market drop-down menu. 3. Click next to the option expiry date to expand the option chain. 4. Double-click on the price in the Bid or Ask column under the Call or Put section. 5. In the FX Options New Order window, make sure Vertical is selected from the Order drop-down menu. 6. Check the settings in the FX Options Strategy section. If desired, click under the Account, Order Type or Operation drop-down menu and change the settings. 7. In the Strategy Settings section, adjust the number in the Lots field for Leg 1 of the vertical. The lot size in Leg 2 automatically updates. 8. In Leg 1, click next to the Strike drop-down menu and select a strike price. Each leg must have a different strike price, so repeat the step for Leg If desired, you can also click under the Date or Option Type drop-down menu and change the settings. The legs in a vertical must have the same expiry, so if you update the date in Leg 1, it appears in Leg 2 automatically. 10. If desired, click the Duration, Greeks, Terms, About Strategy and Analysis tabs to view Handbuch FXFlat Trading FX Options Seite 12

13 other details about the order. 11. When done, click Submit to place your option order. A confirmation window will appear that displays the details of your trade and analysis information. 12. Click Yes to confirm the order. Placing a Straddle Option Order When you select Straddle from the Order drop-down menu, the FX Options New Order window displays settings so you open both a call and a put on a currency pair. With this kind of order, both option legs must be going long (a long straddle) or short (a short straddle) and have the same strike price and expiry. Placing a Straddle Option Order: 1. Select Option Board from the View menu. 2. Make sure the currency pair you want is selected. To change it, click and select one from the Underlying Market drop-down menu. 3. Click next to the option expiry date to expand the option chain. 4. Double-click on the price in the Bid or Ask column under the Call or Put section. 5. In the FX Option New Order window, make sure Straddle is selected from the Order drop-down menu. Handbuch FXFlat Trading FX Options Seite 13

14 6. Check the settings in the FX Option Strategy section. If desired, click under the Account, Order Type or Operation drop-down menu and change the settings. 7. In the Strategy Settings section, adjust the number in the Lots field for Leg 1 of the straddle. The lot size in Leg 2 automatically updates. 8. In Leg 1, click next to the Strike drop-down menu and select the strike price you want. Each leg must have the same strike price, so the strike price for Leg 2 automatically updates. 9. If desired, you can also click under the Date or Option Type drop-down menu and change the settings for Leg 1. The legs in a straddle must have the same expiry, so if you update the date in Leg 1, it appears in Leg 2 automatically. 10. If desired, click the Duration, Greeks, Terms, About Strategy and Analysis tabs to view other details about the order. 11. When done, click Submit to place your option order. A confirmation window will appear that displays the details of your trade and analysis information. 12. Click Yes to confirm the order. Placing a Strangle Option Order When you select Strangle from the Order drop-down menu, the FX Option New Order window displays settings so you open both a call and a put on a currency pair. Like a straddle, both option legs of your strangle must be going long or short and have the same expiry, but your put must have a lower strike price than the call. Handbuch FXFlat Trading FX Options Seite 14

15 Placing a Strangle Option Order: 1. Select Option Board from the View menu. 2. Make sure the currency pair you want is selected. To change it, click and select one from the Underlying Market drop-down menu. 3. Click next to the option expiry date to expand the option chain. 4. Double-click on the price in the Bid or Ask column under the Call or Put section. 5. In the FX Option New Order window, make sure Strangle is selected from the Order drop-down menu. 6. Check the settings in the FX Option Strategy section. If desired, click under the Account, Symbol, Order Type or Operation drop-down menu and change the settings. 7. In the Strategy Settings section, adjust the number in the Lots field for Leg 1 of the strangle. The lot size in Leg 2 automatically updates. 8. In Leg 1, click next to the Strike drop-down menu and select the strike price you want for each leg. Each leg should have a different strike price. automatically updates. 9. If desired, you can also click under the Date or Option Type drop-down menu and change the settings for Leg 1. The legs in a strangle must have the same expiry, so if you update the date in Leg 1, it appears in Leg 2 automatically. 10. If desired, click the Duration, Greeks, Terms, About Strategy and Analysis tabs to view Handbuch FXFlat Trading FX Options Seite 15

16 other details about the order. 11. When done, click Submit to place your option order. A confirmation window will appear that displays the details of your trade and analysis information. 12. Click Yes to confirm the order. Placing a Risk Reversal Option Order When you select Risk Reversal from the Order drop-down menu, the FX Option New Order window displays settings for a call and put option in the same currency pair. The options have a similar delta value and are set up to have the same expiry and number of lots. Placing a Risk Reversal Option Order: 1. Select Option Board from the View menu. 2. Make sure the currency pair you want is selected. To change it, click and select one from the Underlying Market drop-down menu. 3. Click next to the option expiry date to expand the option chain. 4. Double-click on the price in the Bid or Ask column under the Call or Put section. 5. In the FX Option New Order window, make sure Risk Reversal is selected from the Order drop-down menu. 6. Check the settings in the FX Option Strategy section. If desired, click under the Account, Symbol, Order Type or Operation drop-down menu and change the settings. 7. In the Strategy Settings section, adjust the number in the Lots field for Leg 1 of the risk Handbuch FXFlat Trading FX Options Seite 16

17 reversal. The lot size in Leg 2 automatically updates. 8. In Leg 1, click next to the Strike drop-down menu and select the strike price you want. Each leg must have a different strike price, so repeat the step for Leg If desired, you can also click under the Date or Option Type drop-down menu and change the settings for Leg 1. The legs in a risk reversal must have the same expiry, so if you update the date in Leg 1, it appears in Leg 2 automatically. 10. If desired, click the Duration, Greeks, Terms, About Strategy and Analysis tabs to view other details about the order. 11. When done, click Submit to place your option order. A confirmation window will appear that displays the details of your trade and analysis information. 12. Click Yes to confirm the order. Viewing Options in the Open Positions Window Once placed, your market option orders appear in the Open Positions window. Your option stop or limit orders will appear in the Working Orders window until they are triggered by market moves. You can view the premium price, strike, expiration date and time and option type for each option in the Open Positions window along with your regular forex positions. At the bottom of the Open Positions window, FlatTrader displays the Total Delta, Total Gamma, Total Vega, Total Theta, and your Total PL if all positions are in the same currency pair. If you have options in more than one currency pair, you ll need to filter the Open Positions window. To do this, right-click in the window and select Filter. In the Filter window, check mark Use Filter and select one currency pair from the list. On the option expiry, your in-the-money options are exercised automatically by FlatTrader and become regular forex positions in the Open Positions window. Any options that were at-themoney or out-of-the-money will expire worthless. You ll also see your new positions and expired options in the statements in FlatTrader. FXFlat applies an FXO Portfolio Margin requirement whenever traders hold a short option position. FlatTrader automatically calculates this using the Delta and Vega values of all option and spot positions. For more information on how this margin requirement works and how it may affect your balance, contact FXFlat. Customising the FX Options Quote Board You can customise the appearance of the FX Option Quote Board by right-clicking on it and selecting Configure... from the drop-down menu. This displays the Configure Option Quote Handbuch FXFlat Trading FX Options Seite 17

18 Board window, which contains four tabs. On the Underlying tab, you can select the information you want to display as columns in the Underlying Markets row. On the Columns tab, you can select the information you want to display as columns in the Option Chain table. On the Colour and Font tab, you can change the font style for columns in the Option Chain table and the background colour settings for the Underlying Markets row. Handbuch FXFlat Trading FX Options Seite 18

19 On the Pricing tab, you can select the pricing convention you want to use and activate options to help you gauge market moves. Specifying FX Option Order Settings in the Trades Tab On the Trades tab in the Configure Parameters window, you can display settings for placing orders in FlatTrader. When you select the Main tab, you can specify settings that will appear whenever you place an FX option order. Handbuch FXFlat Trading FX Options Seite 19

20 You can set the number of pips or fractional pips of the offset in the Default FX Options Offset section. You can open the Configure Parameters window by clicking Configure from the File menu and selecting. Handbuch FXFlat Trading FX Options Seite 20