
Start Here
Platform

Tour
Bots 101How it worksLive demo
Tools
Automated tradingOptions backtestingWatchlist scannerPrivate community
Use cases
New investorsStock tradersActive tradersPassive investorsSwing tradersAlgorithmic traders

Templates
By trade type
Stock trading botsOptions trading bots
By strategy type
Bullish options strategiesNeutral options strategiesBearish options strategiesHedging strategies
By style
Active and high frequency botsEvent-based botsTrend trading botsMomentum trading botsStatistic and probability-based botsTechnical analysis botsEarnings strategy bots

Integrations

Pricing
Education

Courses
Overview
By experience
Beginner
What is an options contract?Stock trading vs. options tradingOptions contract specificsCall vs. put options basicsBuying options vs. selling optionsOptions profit and loss diagramsOptions pricing tablesOption moneyness (ITM, OTM, and ATM)Options pricing and the "Greeks"Options expiration and assignmentWhat's our "edge" trading options?Single vs. multi-leg options strategiesSmall account options strategies
Intermediate
Fearless, confident options tradingHistorical volatility vs. implied volatilityPredicting market movesTrade size and capital reservesPortfolio balance and beta weightingHow to choose the best options strategyHow far out to place trades?Strike price anchoring with probabilitiesTips on getting your trades filledAdvanced and contingent orders7 step options trade entry checklist
Advanced
Developing a daily trading routineHow to avoid "Black Swan" eventsAdjusting and hedging option tradesExiting options trades automaticallyOptions strategies we don't adjust (and why)Big picture adjustment strategyWhen to adjust or notAdjusting straddles and stranglesAdjusting credit spreads, iron condors, and calendarsSmarter stop-loss ordersBuilding a diversified options portfolioRolling options trades for duration and premiumOptions expiration week position checklistDealing with stock assignment and dividendsHow to free up trading margin and cash
By subject
Options basics
Why options vs. stocks?What is an options contract?Smart use of leverageOption strike priceOption premiumOption expirationOption contract multiplierProfit and loss diagramsLong call option explainedShort call option explainedLong put option explainedShort put option explainedATM, ITM, and OTM optionsCash vs. margin basicsHigh probability trading definedHow to buy a call optionHow to buy a put optionSingle-leg vs. multi-legWhat is the VIX?Is fundamental analysis dead?
Entering and exiting trades
Game of numbers7 step entry checklistStrong liquidity examplesPicking the next directionScanning for tradesOption pricing table basicsSetting up your trade tabPinning your probability of profitUsing delta for probabilitiesBuy to open vs sell to openBuy to close vs sell to closeMarket, limit, stop loss orders5 types of contingent ordersLimit ordersMarket ordersLimit on close ordersMarket on close ordersAdvanced contingent ordersTaking profits before expirationMechanics of rollingConsider future events
Options expiration
Options expiration explainedWhat is the Options Clearing Corporation (OCC)?Physical vs. cash settlement optionsAmerican vs. European style optionsWeekly options expirationWeekly expiration tags/codesOptions assignment processOptions exercise processTrading timeline (duration)
Bullish options strategies
Bull put spreadBull call spreadLong callShort putBull call backspreadPut broken wing butterflyCall calendar spreadPut diagonal spreadCustom naked putCovered callSynthetic long stock
Neutral options strategies
Short straddleLong straddleIron condorsShort strangleLong strangleIron butterflyUnbalanced iron condors
Bearish options strategies
Bear call spreadBear put spreadLong putShort callBear put backspreadCall broken wing butterflyPut calendar spreadCall diagonal spreadCustom naked callCovered putSynthetic short stock
Portfolio managmeent
No guaranteed tradesDon't do something, sit thereAccount size adjustmentsAvoiding stock market overloadStocks, indexes, & ETFsMonitoring positionsCreating automatic alertsIndividual stock betaPortfolio betaBeta weighting your portfolioUncorrelated industries/sectorsSystematic vs. unsystematic riskEfficient portfolio frontierLimiting undefined risk tradesEconomic calendarConcept of legging
Options pricing and volatility
How to find option price quotesUnderstanding the mathIV vs. IV percentileProbability of profit vs. probability of touchOption probability curveBid-ask spread definedIV expected vs. actual moveThe "Greeks"Fatal pricing errorsInverse ETFsOptions parity
Adjusting trades
#1 adjustment for any tradeWhen to adjust a tradeSingle options trade vs. overall portfolioCall spread adjustmentsPut spread adjustmentsShort strangle adjustmentsIron condor adjustmentsShort straddle adjustmentsCalendar spread adjustmentsDebit spread adjustmentsButterfly adjustmentsUsing stop lossesDelta hedgingRolling positionsPairs hedging

Strategies
OverviewLong callLong putShort callShort putCovered callCovered putProtective putCollar strategyLEAPSBull call debit spreadBear call credit spreadBull put credit spreadBear put debit spreadLong straddleShort straddleLong strangleShort strangleCall calendar spreadPut calendar spreadIron condorReverse iron condorIron butterflyReverse iron butterflyCall butterflyPut butterflyStrapCall diagonal spreadPut diagonal spreadCall ratio spreadPut ratio spreadCall backspreadPut backspreadLong box spreadShort box spreadReversalStock repair

Topics
OverviewAsset allocationAutomated tradingBehavioral financeBondsBrokersCandlestick patternsChart patternsDay tradingDividendsEconomic indicatorsEconomicsETFsEquity investmentsExercise & assignmentFinancial analysisFinancial historyFinancial marketsFinancial modelingFinancial theoriesFundamental analysisFuturesInvesting basicsInvestment accountsInvestment taxesInvestor biasesMarket holidaysMarket hoursMarket indexesMarket indicatorsMomentum tradingOptionsOptions pricingOptions settlementPortfolio managementRisk managementStocksStock marketSwing tradingTechnical analysisTechnical indicatorsTrading commissionsTrading platformsTrading psychologyTrend tradingGlossary
Resources

Workshops

Podcast

Blog
Support

Help Center
Overview
Getting started
What is a bot?Creating a bot
Using the bot wizard
Automation typesAutomation editorBot dashboardBot positionsBot logTemplates and cloningKey conceptsSafeguards and limitsPower of botsBest practices
Bot automations
What is an automation?Scanner automationsMonitor automationsEvent automationsEditing automationsReusing automationsCopying automationsOrdering automationsUsing custom inputsBot level inputsAutomation statusesAutomations library
Bot actions
DecisionsOpen positionClose positionNotificationsLoop symbolsLoop positionsBot tagsPosition tags
Bot examples
Genesis 1.0 botGenesis 2.0 botGenesis 3.0 botTrend trading with stocks botPortfolio trend trading botTrend trading with options botMultiple moving averages botTechnical swing trading botTrend and momentum botWeekly credit spread botRecurring iron condors botThe "Honey Badger" botHybrid spreads botHigh IV rank iron condor bot
Decision recipes
Comparing underlying symbol priceEvaluating symbol typeEvaluating underlying symbol OHLCComparing underlying symbol propertiesEvaluating underlying symbol performanceEvaluating underlying symbol standard deviationComparing underlying symbol price to an indicatorComparing multiple underlying symbol indicatorsEvaluating underlying symbol implied volatility rankEvaluating underlying symbol earnings reportingEvaluating underlying symbol price probabilityEvaluating underlying symbol probability within rangeEvaluating bot propertiesEvaluating bot available capital for opportunitiesComparing bot position count to position typeComparing bot position count to underlying symbolEvaluating bot position count to position type and underlying symbolEvaluating bot last position activityEvaluating bot last activity with underlying symbolEvaluating bot position activity historyEvaluating bot position activity history with underlying symbolComparing bot active orders statusComparing bot active orders status with underlying symbolEvaluating bot position availabilityEvaluating bot tagsEvaluating opportunity availabilityEvaluating opportunity return expectationsComparing opportunity attributesComparing opportunity leg attributesComparing opportunity bid-ask spreadEvaluating opportunity probabilitiesEvaluating position performanceComparing profit target to trailing valueComparing position time to expirationComparing position durationEvaluating position underlying symbolComparing position propertiesComparing position leg propertiesEvaluating position typeEvaluating position sideComparing underlying symbol price to position legEvaluating position tagsEvaluating underlying symbol indicator propertiesComparing multiple underlying symbol indicator propertiesEvaluating MACD technical indicatorComparing Bollinger Bands to symbol priceEvaluating stochastic technical indicatorComparing VIX propertiesEvaluating market time of the dayEvaluating days of the weekEvaluating bot switches
Position statement
Activity summaryPosition detailsTrade detailsOpened positionsClosed positionsCanceled positionsOverride positionsExpired positionsPosition historyManually open positionManually close positionImport position
Order pricing
SmartPricingFinal price settingsPosition summaryOrder detailsWorking ordersManual override
Bot templates
Creating new templatesUpdating existing templatesDeleting templatesSharing templatesUpdating shared templatesTemplate best practices
Cloning bots
Cloning existing botsCloning from templateCloning from shared template
Troubleshooting
Using bot logsTesting your botsNot enough capital warningDaily position limit warningTotal position limit warningPricing anomaly warningMissing or invalid input errorDaily symbol limit errorExcessive errors failsafeOverlapping strikes failsafePrice exceeds strike-difference errorOptions expiration protocolDuplicate orders errorOptions approval level errorBot event loopsStock splits and corporate actionsSupported browsersSupported countries
Community forum
Community guidelinesCrafting your introductionSending group messagesSending private messagesAttaching bot templatesReceiving bot templatesAttaching automationsReceiving automationsFollowing tradersPosting publiclyEditing posts and messagesSubscribed discussionsUsing bookmarks
Using backtester
Running a new backtestBacktesting results summaryModifying existing backtestsMy backtestsInstantly create bot from backtestBacktesting research databaseTop backtestsBacktesting errors
Account settings
My profileTrading accountsConnecting to TDAmeritradeConnecting to TradeStationConnecting to TradierIncompatible accountsPassword managementSession timeoutTwo-step authentication
Technical docs
Infrastructure and securityAutomation structureAutomation behaviorData feedsOrder handlingTrade enforcementsBroker rejection errorsBot limitationsProfit and lossFair value pricingDecision propertiesDecision calculationsParameter selectionCalculating probabilityPlatform indicators

Contact
Send FeedbackReport IssueEmail Us
Option AlphaOption Alpha

LoginSign Up
ResourcesPodcast

Four "Wicked-Smart" Ways to Use SmartPricing

On this episode, we'll explore four intelligent ways you can leverage SmartPricing in your automations.
Four "Wicked-Smart" Ways to Use SmartPricing
Kirk Du Plessis
Jun 29, 2022

As you go deeper into options trading, there are always ways you can use technology to keep improving, no matter your experience level. There are so many opportunities to leverage bots to your advantage now that automation is available.

SmartPricing places timed limit orders in a sequence, traversing the bid-ask spread until you reach your final price. Simply said: it finds the best possible price for your order.

SmartPricing

In this episode, I walk through four "wicked-smart" ways you can leverage our proprietary SmartPricing technology to send orders intelligently (plus a bonus idea you’ll love!).

If you're already autotrading with Option Alpha, you'll learn some new techniques that will help improve the efficiency of your bots and automations. If you're not trading with bots yet and are still entering open and close orders manually, waiting for trades to fill, canceling and replacing orders, chasing price, and settling for standard limit orders, you'll love how much time you save when using SmartPricing.

Sign up now for a FREE 30-day trial to see SmartPricing in action.

1. Adjust the core SmartPricing setting

There are three SmartPricing settings:

  • Normal - starts at approximately 50% of the bid/ask spread and works towards 100% through four evenly distributed prices in 10-second intervals.
  • Speedy - starts at approximately 50% of the bid/ask spread but works towards 100% with three prices in 5-second intervals.
  • Patient - starts at approximately the mid-price and tries up to five prices, waiting for 20-seconds at each price before moving to the next price.

Changing the core settings is an easy adjustment that lets you control how quickly the bot will work through each price level. You can always choose to turn off SmartPricing and use a single limit order.

SmartPricing settings

For example, when market volatility is high, you could use the 'Speedy' setting to exit positions quicker and avoid P/L swings. If the market is less volatile, you may want to use the 'Patient' setting and allow the bot to maximize a trending position's potential.

2. Adjust the final price and bid/ask spread percentage

The final price is the last price in the SmartPricing order sequence. It is the minimum price when executing a sell order and the max price when submitting a buy order.

The default final price setting is 100% of the bid-ask spread. You can manually input the range for any value between 50%-100% or set the value as a dollar amount. These variables can be edited and customized at any time in every order action for different entry and exit scenarios.

For example, you can adjust the final price the bot will use if an unusually good opportunity comes along. Maybe your normal setting is 60% of the bid-ask spread. If you have a great setup that doesn't occur often, you could change the final price setting to 80% of the bid-ask spread to ensure you don’t miss the opportunity.

SmartPricing Final Price settings

SmartPricing and final price settings are customizable and can be used for all order actions in any automation type.

We also suggest using a bid/ask spread filter before opening or closing a position. There are fluctuations in all products and options, so using SmartPricing and opportunity filters is a best practice to leverage automation technology when dealing with bid-ask spread volatility.

3. Use the trade price calculations to set your final price

You can also use a calculation to set the final price as a function of the position’s opening price and allow SmartPricing to calculate for you on each position. The bots intelligently reference the original opening order execution details.

For example, for credit spreads, you can input the trade price at x .5 to set the final price at 50% of the entry price. SmartPricing will still try for better pricing if available but won’t close a position for less than a 50% profit.

Final price calculation function

4. Deploy a bid/ask spread waterfall strategy

This advanced method combines multiple SmartPricing types, percentages, and trade prices.

SmartPricing waterfall

You can tell the bot exactly how to send orders and when to stop sending orders using different SmartPricing settings that are relevant and dynamic for current market conditions.

For example, in this bot’s monitor automation you’ll see the first decision in the waterfall is to evaluate if the bid/ask spread is less than the Level 1 input ($0.15 in our defaults). If the bid/ask spread is $0.23, it is not less than $0.15 and, therefore, would result in a ‘No’ decision for the Level 1 check. Had the current position’s bid/ask spread been less than $0.15, the bot would go down the ‘Yes’ path and send an order to your broker to close using Level 1 price settings (100% of the bid/ask spread in our defaults). 

Continuing down the ‘No’ path since the spread is not currently less than $0.15, the bot then evaluates if the position’s bid/ask spread is less than Level 2 input ($0.25 in our defaults). The bot would continue through the automation’s bid-ask spread waterfall to ensure you don’t close a position with a wide spread.

SmartPricing waterfall automation editor

Notice that as the spread becomes wider, the SmartPricing settings for the final price are adjusted to control slippage when exiting the position.

Option Alpha members can see a more detailed explanation of this unique strategy in the Community post here or check out the new 'Hexabot' template that employs the waterfall technique.

5. Use a ghost order

Here is a bonus idea! This is another great example of using SmartPricing for unique opportunities. The ‘ghost order’ is simply a close position action you add to the end of a 'No' branch in a monitor automation.

Typically, monitors close a position, open a hedge, or, if your criteria are not met, the automation ends and runs again at the next interval. 

But, here’s a wicked cool idea you can use to to turn off SmartPricing and use a standing limit order in between automation runs to potentially exit a position that otherwise wouldn’t have closed. 

Say your position hasn’t reached a profit target. You can attach a final price setting that sends a limit order to your broker and stays active for 5 mins, just in case your position reaches the target price after the monitor runs. Essentially, the bot always looks to close a position at your preferred profit target and never leaves an empty 'No' path at the end of an automation.

This concept is discussed in more detail during the ’Wicked Smart Automated Trade Management Ideas‘ workshop at the 8:50 mark.

SmartPricing
Open Position
Close Position
Scanner Automations
Monitor Automations
Exiting Trades

4.8 (1.1k Ratings)
Subscribe Now

No-code, fully automated trading for stocks and options.

HomeAboutLegalStatusContact
©2022 Option Alpha. All Rights Reserved. Patent Pending USSN 63/118,547