Advanced Options Chain

Main Content Window  || Panel 1: The Option Chain #

The main content window houses many tabs. Let’s discuss one of the most important panel i.e. the Option Chain. The option chain window displays all expiry series associated with an underlying stacked in the form of rows. Upon clicking on the green arrow, the entire option chain comprising of the individual CALL and PUT strikes of that series will open up.

We have two important controls of the option chain on the TOP bar,

• Three different View of option chain, viz.
  • Standard view
  • Heatflow view
  • Straddle view

• Selection to display number of strikes of each series, ranging from 4 strikes to 40 strikes

1. STANDARD View #

• Check Implied Volatility, Max Pain, PCR and Cumulative OI :-

These are some of the important statistics every option traders use. Options Desk provides users to check Implied Voatility (IV), Open Interest (OI), Put Call Raios (PCR) and Max pain associated with each of the series. We just need to hover mouse cursor over each series to check the same. We can also change it in setting “Series Statistics” to “Always Visible” instead of hover.

This is a Series Level statistic, for checking each strike specific statistic we will see further in the document.

• Field Settings:

We have over 30+ fields to choose.

• Price Metrics:
  • Open,
  • High,
  • Low,
  • Close and Last Traded Price (LTP)
  • Ask
  • Bid
• Price Variance Metrics:
  • 24 HR Change and
  • Price Change %
• Volume Metrics:
  • Volume Traded
  • Ask Volume
  • Bid Volume
• Open Interest Metrics:
  • Open Interest
  • 24 HR Open Interest Change
  • Open Interest Sense: See this definition
• Options Analytics:
  • Implied Volatility (IV): Implied volatility is the market’s forecast of a likely movement in a security’s price. … When applied to the stock market, implied volatility generally increases in bearish markets, when investors believe equity prices will decline over time
    • Mark IV
    • Ask IV
    • Bid IV
  • In the Money (ITM) Probability: Probability that the contract will be ITM by expiry
  • Intrinsic Price: Price of an Options contract based on Black Scholes Model
  • Extrinsic Price: LTP – Intrinsic Price
• Greeks:
  • Delta: Delta is a ratio—sometimes referred to as a hedge ratio—that compares the change in the price of an underlying asset with the change in the price of a derivative or option.
  • Gamma: Gamma is one of the Option Greeks, and it measures the rate of change of the Delta of the option with respect to a move in the underlying asset. Specifically, the gamma of an option tells us by how much the delta of an option would increase by when the underlying moves by $1.
  • Vega: Vega is the Greek that measures an option’s sensitivity to implied volatility. It is the change in the option’s price for a one-point change in implied volatility
  • Theta: The Greek that measures an option’s sensitivity to time is theta. Theta is usually expressed as a negative number. Be careful to always make sure what time is referenced in the model you are using.
  • Rho: Rho measures the expected change in an option’s price per one-percentage-point change in interest rates. It tells you how much the price of an option should rise or fall if the risk-free interest rate (U.S. Treasury-bills)* increases or decreases

These are statistics displayed at each strike price in the option chain. To choose a field and add to the chain, simply RIGHT-CLICK on the Column Headers

• Option Geeks & Trading through Option Chain:-

To see the option geeks we need to add it from the Field settings. However, if we just add Delta and hover the mouse cursor over it, it displays all option geeks of that particular strike.

If we add OI Sense from field settings, the inbuilt logic shows whether a particular strike is in Long Buildup, Short buildup, short covering or Long unwinding

The small BLUE and RED dots at the end of each series denotes whether the data in the respective series is signaling bullish or bearish pattern. Many other important fields must be explored by each user as per their trading style. The Buy/Sell button are visible while hovering on each strike and can be used to buy/sell naked in paper mode or Add to a existing strategy

• Open positions & BEP on Option Chain :-

You can add Paper Positions in a number of ways

1. Click on BID and Ask fields
2. Click on the hovering BUY/SELL buttons
3. Right Click on any given Options Contract in the Options Chain

In the option chain itself we can see our open position quantity and Break even points. The Green and Red Bars on left of strike prices indicates BEP, the cumulative effect of all open strategy is considered and the strikes where green bars are shown up is the range within which the portfolio would be profitable.

2. HEATFLOW View #

Heatflow view gives us a holistic view of near and farther away series and Call & Put strikes at the same time.

It helps gauge volatility in the overall market while observing significant movement in the farther strike prices. From the view selection option on right hand side of the Top Bar, we need to switch to Heatflow view from ‘Standard View’ which is set by default

To view different fields in Heatflow mode, go to Settings in the Top Bar, and choose from over 10+ fields. Many important fields like OI, OI Change, IV, In the Money Probability etc can be observed of various strikes at the same time.

3. STRADDLE View #

Straddle view is one of the most talked about and excellent feature on Optionsdesk. It is a must have tool for straddle strategy players.

It gives us the Bid Price to long a straddle and the Ask Price to short a straddle at various strike prices and easy selection of various expiry series as well.

It helps us observe important statistics like Max pain, PCR, OI etc at each strike price along with straddle cost at the same time and also with a quick switch to check prices of other expiry series as well.

Lets take a glance at it here

Video Tutorial #