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For example, a simple use case would be to see what would happen to a long call option (buy call) if the underlying moves 10% by expiration. Once you enter these values, you can filter and sort by the scenario column, and integrate it with all the other data points we have (such as IV percentile, max loss, break-even point, probability of profit, etc.)
Scenarios for the entire market
Our scenario engine is a unique feature that allows you to see the profit and loss of the option position, assuming a specific scenario. The first feature will let you understand what will happen to the trade if the underlying asset moves to a specific price by expiration.
For example, a simple use case would be to see what would happen to a long call option (buy call) if the underlying moves 10% by expiration. Once you enter these values, you can filter and sort by the scenario column, and integrate it with all the other data points we have (such as IV percentile, max loss, break-even point, probability of profit, etc.)
How to use:
The main power of our scenario engine is that it works on the entire market at once, and allows you to scan, sort, and integrate it with all other data points to find the best trades for your trading style.
To add a scenario:
- Click the 'add scenario' button.
- Pick the underlying shift by expiration. You can see all available data points here (knowledge base article).
- In this example, we will choose one standard deviation move up.
- Filter to only see profitable trades, more than 100%.
- Add some filters to see that the underlying are bullish (MA 200>0%)
- Then sort by minimum max loss percent.
The results are all the options that will (at least) double their price if underlying moves one standard deviation up and are in a bullish trend (each stock according to its volatility).
You can see more use cases in the 'Use Cases' section in the knowledge base and links at the end of this article.
Unlimited scenarios:
You can add more than one scenario to the scan. In fact - you can add an infinite number of scenarios (and save them for future use).
This can be useful if you want to see trades that are good in both one standard deviation above AND below the current stock price. And you can also add for two standard deviation moves, or analysts target. The flexibility of this engine, combined with the 100s of data points we have and the ability to save your scans, allows you to find the perfect trades for your trading style.
Predefined scans using scenarios:
We've added predefined scans that use scenarios to help you get started. To access them click the 'scenario' tag.
The first scans are using the scenarios engine to find short-term options that will double or more in size if the stock moves more than 1 ATR.
The scans:
Note: We have a Stock scenario engine for one stock. This allows you to compare all options strategies for one stock. You can read more here: Stock Scenario.
Read more:
Read about available data points for the scenario engine: KB article
Read about example use cases for using the scenarios: Weekly options that will double in value
Read about example use cases for using the scenarios: Weekly options that will double in value
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