Risk Tab

Overview

The Risk section on Options Desk is designed to help traders hedge their risk effectively by using a variety of options and futures strategies. It provides tools for creating, analyzing, and managing predefined and custom strategies to optimize trading decisions. Below is a detailed guide to the features available in the Risk section.

Features of the Risk Section

1. Predefined Strategies

The platform offers a variety of predefined strategies that traders can use to manage risk efficiently:

• Standard Strategies: A wide range of common strategies like Straddle, Strangle, Iron Condor, and others are ready to be deployed with a single click.
• These strategies are designed to cater to different market conditions, allowing traders to easily select the one that fits their outlook.
• These can be accessed by clicking on predefined strategies.

2. Custom Strategies

Traders can also create their own custom strategies tailored to specific market conditions:

• Select different expiries and strike prices for options.
• Add underlying futures contracts by using the Add Underlying option.
• Flexibility to build a strategy from scratch that aligns with your risk appetite.

3. Trading Strategies

The Risk section supports trading directly from the strategy setup interface:

• While creating custom strategies, a Basket Order option appears to place trades either in real-time or in a simulated environment.
• Traders can also execute trades later by clicking on the Place Basket Order button after analyzing the strategy.
• Close positions by clicking the Close Position button next to the basket order.

Individual strike price features include:

• Select/Unselect: Choose to include or exclude a specific strike price from the overall basket order analysis on the PnL graph.
• Close Strike: Click on the Green / Red circle to close or open position on that particular strike price.
• Reverse Position: Use the B (green) or S (red) options to reverse the position on a strike price.
• Trade Specific Strike: Hover over a strike price to get the option to trade that specific strike directly.
• Analytics and Removal: Click on the three dots to see detailed analytics, or press the cross button to remove a strike price from the strategy.

4. Editing Strategies

Traders can edit their strategies with ease:

• Use the Edit button located at the top left corner of the sidebar to modify the strategy.
• Toggle the sidebar on or off by clicking the Toggle button to enhance your view of the strategy setup.

5. PnL Graph

The Profit and Loss (PnL) Graph provides a visual representation of the expected outcome for the deployed strategy:

• Analyze the impact of Theta Decay, Volatility, and Price Changes on your strategy.
• View the Greeks associated with the strategy below the payoff graph to understand risk factors like Delta, Gamma, Vega, and Theta.

6. Metrics on the Top Bar

The top bar in the Risk section provides essential metrics for evaluating the performance of your strategy:

• Real-time PnL: Monitors live profit and loss.
• Max Profit: The highest potential gain from the strategy.
• Max Loss: The maximum possible loss you could incur.
• Probability of Profit (POP): Likelihood of a profitable outcome.
• Premium Received: Total premium collected from options sold.
• Breakeven Point: Price at which the strategy neither gains nor loses.
• Estimated Margin Required: Margin needed to deploy the strategy.

Conclusion

The Risk Management section is a comprehensive tool designed to assist traders in creating, managing, and analyzing both predefined and custom strategies. With features like a PnL graph, real-time trading, and detailed risk metrics, it empowers traders to make data-driven decisions to hedge their market risk effectively.