When trading options, have you also encountered these issues: trying to set up a combination options strategy to handle earnings volatility, only to find the profit and loss calculations overly complex; seeing the payoff diagram at expiration but unable to visualize what happens before maturity; wanting to know how much you might lose if implied volatility (IV) changes next week but not knowing how to calculate it; or adjusting the strike price and then needing to check the profit and loss again, which requires switching back and forth on the options chain, wasting a lot of time...

Stop struggling with complicated tools! Our newly launched desktop feature, "Options Profit and Loss Analysis," is designed specifically to address these pain points. Let us walk you through it.

1. What is "Options Profit and Loss Analysis"?

As shown in the figure above, it intuitively displays the profit and loss situation of an options order. Compared to previous profit and loss analysis functions, its key upgrades are in three areas:

First, it can simulate profits and losses under different dates, different IVs, and various stock price scenarios, dynamically and visually presenting the profit and loss conditions across different situations.

Second, in addition to showing profits, losses, and breakeven points, the chart can also display Greek letters, expected asset price volatility ranges, and more, giving you a clearer understanding of the overall risk of the order.

Third, you can directly modify parameters on the chart, including adding options or underlying stocks, as well as flexibly adjusting strike prices, expiration dates, buy/sell directions, and quantities, without having to return to other pages to make selections.

2. How to use "Options Profit and Loss Analysis"?

Below, we will guide you through using this powerful options tool in three steps.

1) How to access this feature page?

Essentially, a specific order must first be selected before proceeding to the profit and loss analysis of that order, and there are two ways to select an order.

One way is through the options chain, following a path such as: NVIDIA stock quote page - Options - Options Chain - Select a straddle option combination - Choose the appropriate strike price and expiration date - Click on Profit & Loss Analysis.

The other way is through option strategies, with a path like: NVIDIA stock quote page - Options - Strategies - Bullish - Set target price and expiration date - Click the 'Trade' button to the right of 'Buy Call Option.'

2) How to understand and use this functionality page?

Upon entering the 'Options Profit & Loss Analysis' page, you will see some options below the profit and loss chart (highlighted in yellow), and by default, the page displays the order's profit and loss at expiration, current profit and loss, and breakeven point at expiration.

Let us first explain what these different options within the yellow box represent.

● Profit & Loss at Expiration: Refers to the profit or loss situation of this order under different stock prices on the day the option expires.

● Current Profit & Loss: Refers to the profit or loss situation of this order under different stock prices at the current time.

● Breakeven Point: This refers to the breakeven point on the day the option expires. If the stock price falls below or rises above this point, a loss or profit will occur.

● Delta, Theta, Gamma, Vega, Rho: These are the option Greeks, and their specific explanations can be found directly in the table below.

● EM: Refers to the expected fluctuation range of asset prices until the expiration date, which is calculated based on the IV for that maturity. If there are multiple maturities, the EM displayed corresponds to the nearest expiration date.

● Stock Price Probability: Represents the distribution probability curve of stock prices at different levels under a given date and a specific IV.

You can choose to display or hide certain options according to your needs. For instance, when analyzing risk exposure, you can bring up the Greeks. If you feel that too many indicators are affecting your analysis, you can also choose to hide all options except for profit/loss at expiration, current profit/loss, and breakeven points.

Next, let’s explain the blue-framed section in the static image above. Within the frame, there are two indicators: one for the date and the other for IV. Both are adjustable via sliders. This means you can slide these two controls to adjust the date and IV arbitrarily, and the profit/loss chart above will change accordingly, along with multiple parameters on the chart.

3) How to modify orders directly on the chart?

If your trading expectations change or you want to explore different order scenarios, you can modify them directly on the chart without returning to the option chain to reset. There are three ways to make adjustments.

One way is to fine-tune on the chart. Double-click the name of the single-leg operation, and in the pop-up window, you can directly modify the expiration date, strike price, option type, direction, and quantity.

Another way is to fine-tune at the order section. In the trading order area at the bottom of the page, you can also see parameters such as expiration date, strike price, option type, direction, and quantity. Click on the parameter you wish to adjust and make the corresponding modifications.

A third way is to use small icons for automatic micro-adjustments. Below the chart, by clicking the small icons, you can increase or decrease the strike price, adjust the spread between strike prices, modify the transaction quantity, change the expiration date, or switch between buy and sell directions.

In addition, you can add several legs to an existing order to form different option strategies. For example, you can add two legs to a Bull Call Spread to create a Long Call Condor strategy.

One last reminder! If you make any errors while performing the above order modification operations, you can always undo them using the Ctrl+Z key combination.

With that said, does the "Options Profit and Loss Analysis" feature better meet your needs? Go ahead and give it a try to take your options trading to the next level!

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