TIP: If you are learning about advanced options orders for the first time, please begin with the Trade Advanced Options topic. It will point you back to this topic when you are finished. You will also want to review the different types of strategies available in the Advanced Options Overview topic. |
Get a quick overview of Advanced Option Trading in StreetSmart.com® in this Advanced Options training module.
Instructions for placing an advanced options order vary depending on whether you use the Strategy Filter or Combo to find pairings. Use Strategy Filter if you want to use one of the available strategies to identify options pairings. Use Combo if you already know which contracts you wish to pair in the order.
Rollout | Exp Leg 1 is the expiration month for the option position you wish to Close and Exp Leg 2 is the month for the position you wish to Open. |
Calendar Spread | Exp Leg 1 is the near expiration month and Exp Leg 2 is the far expiration month. |
Vertical Spread | Select the Spread Range, which will show you potential spread trades where the range between the two contract strike prices is equivalent to the spread range you specify. |
Collar / Straddle / Strangle | Select whether you want to view combinations that are Around the Money, Above the Money, Below the Money, or to see all at once, leave the default All Money. |
Ratio Spread | The quantities of the two legs must be in a 2:1 ratio. Change the quantity of the Leg 1 and the Leg 2 quantity will change accordingly. |
TIP: The Net for a debit or credit consists of the ask price of the leg being bought and the bid price of the leg being sold. The net is the difference between debit of the purchased leg and the credit of the sold leg. |
Buy Write-Unwind / Sell Write-Unwind | You will need to select the price indication from the Debit side, and when closing (Unwind), select from the Credit side. Note: In some cases a credit could be displayed for opening transactions and a debit for closing transactions. |
Straddle | The net is the total of the two bid prices of the options being sold (bid) or the total of the two ask prices of the options being bought (ask). |
Buy Write-Unwind / Sell Write-Unwind | Remember the quantity represents 100 shares of the underlying stock, and 1 option contract. Adjusted contracts are not included. |
Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Multiple leg options strategies will involve multiple commissions. Please read the options disclosure document titled "Characteristics and Risks of Standardized Options." Member SIPC
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