Smart Dealing
Essential for trading! One-click automation to build and execute combination strategies for multiple options, effectively reducing execution costs and market volatility risks.
Last updated
Essential for trading! One-click automation to build and execute combination strategies for multiple options, effectively reducing execution costs and market volatility risks.
Last updated
Smart Dealing is a very useful tool for traders to execute multi-leg strategies in an automated and efficient manner. By using this function, you can reduce commission fees, get more favorable pricing in the market, and mitigate risk for active strategy.
You can use Smart Dealing by first seleting the underlying asset you would like to trade on the top of the module, and you can unfold all legs to see all the details at the same time. Then there are several pre-built strategies that you can choose from, or you can build your custom strategies too.
In the main interface, you can modify the details of the instruments. And if you are trading options, you can adjust Expiry, Strike, Qty, and Price to your needs; if you are trading futures, you can also change Expiry, Qty, and Price.
Within the Price section, we set the defaut to Limit-Dynamic pricing (the 2 other selections are traditional Limit-Fixed order and Market order), this means for the order you subimit, it will always be placed at the Mid (or whichever choice you highlight) based on the current order book. It also has a dynamic checking mechnism - for example, if you use 30s as the check time, then for every 30s, our system will check if your unfilled order is still at Mid. If your active order is no longer at Mid due to market movement, the system would replace the outstanding order at the new market Mid. And if the price range is no longer valid (such as liquidity issues), the order will be cancelled.
When you have any option legs, and you are adding one futures leg at the same time, after clicking Delta Exchange, the system will propose the Qty for the perp leg, to neutralize the total delta for the entire strategy. More importantly, when we execute futures along with options, our system will ensure that the options will be filled first before the futures, so the risk of the strategy will be more manageable.
Obviously, on the main interface, there are some more handy features for you to build your strategy efficiently.
On the right side of the module, there is Balance Trade. Balance Trade helps you to divide a single large multi-leg order into smaller parts. The max number of parts depends on the smallest size of the order per different exchanges. In the example below, the system divides the an option order of 2 legs into 50 smaller parts. The system will then submit 1 part of the order to the market every time, and will not submit further parts until the previous part is filled.
In addition, once you click into the setting of Balance Trade, there are a few parameters you can adjust. If you set the Check Filled to 1 min, then once one of the legs in the current active part get filled, the system will wait for 1 minute for the other legs to be filled at pre-set dynamic price. But if any of the legs are not filled within this period, the unfilled legs within this part will be filled at market order, to maintain the proper ratio among legs for the strategy. You can also choose End Task limit based on your preference. After this limit, any of the unfilled parts in this order will be either cancelled or filled by market order. Apparently, if you are extremely patient, you can also set both to No Limit, and wait for the market to meet you at where you feel comfortable with.
Within this Scenario section, you are able to see your payoff diagram for the proposed strategy. You can also adjust the IV surface up or down by changing the IV adjuster. You can also drag the date to any date before expiration date, to see the potential payoff of your strategy in different scenario. Additionally, you can toggle Include Real Positions to see the payoff diagram of your entire portfolio including proposed trades.
If you would like to see more details of the scenario, you can hit More to show a more detailed table. In this table, you can see your potential PnL and Risk in a very granular way under different scenario for the next few days. You can not only adjust the IV parallel, but also choose specific expiries to move up or down. Furthermore, you can enter delivery price for specific expiries. Once you finalize all your assumptions, simply click Query to update the scenario.
Lastly, in the Greeks section, you can see the Greeks for the strategy as well as for the entire portfolio after executing this strategy. You can also use Gamma Neutral and Vega Neutral to propose strategy with minimal risk in Gamma or Vega.
