On: January 29, 2019 In: Handy Trader, Most Common, Trading Platforms

Placing an Option Spread Order in Handy Trader

This tutorial will demonstrate how to place an option spread order in Handy Trader.

The first step to view an option chain is to tap on the More Menu button and then Order Ticket. From there you can type in the symbol under the search area. In this example, we will enter Target Corporation, Symbol TGT. Once you type in the symbol and click search, you will then want to select the appropriate product and exchange you want to trade on. If you are approved to trade other products or in other countries, you may see other products and exchanges under the drop-down menu. Please make sure you select the appropriate product any exchange. In this example, we will select TGT on the New York Stock Exchange and select Option Chain and Strategy Builder.

If you would like to see all the available strike prices you can scroll up and down on your screen.  If you would like to change expiration dates you can scroll to the right under the expiration column headers.

You will also see the underlying stock price on the top section of the option chain. The calls are on the left side and the puts are on the right side. In this example, we will buy 5 of the October 19, 2018, 82.50 calls and sell 5 October 19, 2018, 90 calls. This will result in a debit spread.  To place the spread you will want to turn on the Strategy Builder section at the bottom of the option chain window.

You can then add legs by simply tapping the bid/ask in the option chain. We can tap the ask and it will place a buy order for the 82.50 Calls. We can now tap the bid under the 90 calls. Once we have that selected we can tap the Order button.

You will want to scroll down to see the order details. Since we are placing an order for 5 contracts we can select the quantity as 5. Let’s say we want to purchase these for a net debit spread of 4.00. Under the limit price, we can enter $4.00. In this order, we will keep the order good for the day.

It’s important to note that with a limit debit spread order to buy you are specifying to buy that option spread at the limit price you specify or better. With a sell limit order, you specify to sell that option spread at that limit price or higher. Please note that limit orders guarantee your price but do not necessarily guarantee your execution. There has to be a market for the option price that you specify and there could be instances where there are orders ahead of yours or there are only enough contracts to fill at that price.

You can preview your order by tapping the preview button. You can then review your order and if you have a margin account, you can see the margin impact the order will have as far as margin requirements go.  When you are ready to submit your order, you can slide the Submit Buy button. If you would like to view your order you can go under the Orders and Trades button in the menu tab. If you would like to modify your order you can tap the order and then select the modify button. From there you can enter in a limit price. If you would like to cancel the order, which will also cancel the other order, you can select Cancel.

Thank you very much for being a Zacks Trade client. We hope you enjoyed this tutorial and found it helpful.