• Options Trading Software

  • There are a lot of different options trading software platforms on the market. Some are free (you get what you pay for) and some are extremely expensive (you get less than you pay for).

    The software I use for trading options as well as trading futures is Gecko Software’s Track n’ Trade Live. I’ve been using their software ever since it first came out about 20 years ago.

    I’m not writing this to try and promote their software but just to let you know what I use. I’ve tried free and very expensive trading software and this seems to be the best bang for the buck on the market and they have good tech support if you need it too.

    Options Trading Software: Know Your Options

    Anyway, there are only two types of options, Puts & Calls. A Put Option gives you the right but not the obligation to be short the market from a specific price within a specific period of time. A Call Option gives you the right but not the obligation to be long the market from a specific price within a specific period of time. That’s all options are but it’s not all you need to know before you trade them.

    Now with that said, there are dozens of ways to trade option some as simple as buying or selling a Put or Call “at the money” which is the strike price of the option that is closest to the where the market is currently trading. Then there are very complex options strategies like Iron Condors which involve selling and buying multiple options at different strike prices.

    Even With Options Trading Software, There’s Risk.

    There is no way to trade options with zero risk. If anyone tells you there is then they are not being honest with you. I guess you can read that as “they are lying to you”. I won’t ever do that. Without risk there can be no reward and that goes not just from trading but for life in general. I don’t know of any successful person who became successful without taking a risk.

    I don’t want this article to be an in-depth study of all the different ways to trade options. I am going to show you the options trading software that I use and I will also give you a link to get a free trial version if you want one.

    See How The Trading Software Works

    On the following chart of the June British Pound I purchased a 14600 Put Option that, as of today, expires in 25 days. I paid $2,187.50 for it and it’s liquidating value or LV is $3,387.50 or $1,200.00 more than I paid for it. That means right now if I just wanted to get out of this trade I could buy back this Put option and make about $1,200.00. I’ve only been in this trade for about a week so that’s pretty good in my opinion.

    If the British Pound drops some more, the more it drops the more my Put Option is worth. There is something called “time decay” that will also affect the value of the option but I will leave that for another day.

    All well and good so far. I sold a Put wanting the market to come down and it has. I want to tell you the risk I took too. The total risk I took on buying this option is that I paid for it which was $2,187.50. I can’t lose more than that but I could certainly make a lot more.

    options trading software

    In theory there is unlimited reward but that’s just in theory. The British Pound will not go to zero in the next 25 days. So how much can I make? That’s a good question with an almost impossible answer. I can only show you what it could be worth if the price came down to a certain point in the next 25 days.

    If price came down to 1.4106 before the option expires as you can see on the chart below the strike price would be $3,050.00 “in the money”. So it will be worth $3,050.00 less what I paid for it which was $2,187.50. The difference is $862.50 which would be my net profit at expiration.

    I can almost hear what you are thinking now that if the option has increased in price by $1,125.00 right now and it will only be worth $832.50 if the price keeps going down why is it worth more now even if the price is higher than it will be at expiration if the price is lower?

    It’s because it still has 25 days left until it expires and the person who sold it to me still has the risk that in the next 25 days the price could go way down and he or she would lose even more money. Time value is a very large part of the price of an option.  (By the way as I’m writing this I just exited this position with profits on $1,125.00 so you won’t see the order on the following charts).

    Let’s say that the price drops down to 1.3845 in the next 25 days what would I make. (I don’t think it’s going to and that’s why I got out now). As you can see on the chart below the price would be $4,881.52 “In The Money”. So I would make $4,881.52 less my cost of $2,187.50 or a net profit of $2,694.02.

    Get Out When The Time’s Right

    Well price could be down there but there are other technical reasons why I got out today. That’s something to remember; just because you bought an option doesn’t mean you have to keep it until it expires. You can get out with a profit or a loss anytime the markets are open. You don’t have to be “married” to the option in other words.

    Also a profit of $1,125.52 for a week’s work isn’t bad. Actually it’s not a week’s work either, just an hour or so finding the trade, putting it on and taking it off, this time with a profit.

    Trading options can be very profitable if you just learn what you are doing; develop a trading strategy and stick with it.

    I almost forgot. You can find a link on my homepage under “Software” where you can get a free 14 trial version of their entire Live Futures Trading software of course including the options trading software.