Three new decisions make it easier to evaluate a position’s moneyness inside an automation. With these new decisions, you can easily determine if a position is IN or OUT of the money, and by how much.
The bot references the short leg’s moneyness for credit spreads and the long leg for debit spreads to determine if the position is ITM or OTM.Â
You can also evaluate how far in or out of the money the position is using different % or $ amounts to give you more specific options when managing positions.Â
You can then combine these new recipes with other decisions for specific and detailed position management. For example, you could check a position’s moneyness in conjunction with days to expiration and its probability of expiring in the money.
You can also use this decision to evaluate if a position's underlying stock price is approaching you short strikes. Check out this great example from the Community:
See the image below for a quick refresher on options moneyness.
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