Real Time Markets
For demonstration purposes, Practice To Profits will be used. Practice to Profits is a
practice trading platform that allows you to practice for real without using real money.
You will know when it’s time to switch to the real thing (using real money).
myTrade is a link to a Direct Access Broker called Track Data. When you’re ready to
open a real money account with Track Data simply open ‘Open Account’ and follow
directions.
First of all: once you have opened Practice to Profits you can go to ‘File’ and create, reset
or delete an account.
Placing an order to buy stock:
A. Select Account
B. Trade Type: Stock
C. Routing (if Routing is asked for): iRoute
D. Symbol: Stocks ticker symbol
E. Quantity: Number of shares you wish to purchase
F. Action: Buy
G. Order Type: Limit
H. Duration: Day
I. Condition: None
J. Limit Price: Left-click on the ask price (ex: 77.41) and it will populate the
Limit Price (as seen above). Or you can type it in manually.
If you wish to use a Market Order vs. a Limit Order, then select Market
under Order Type and the order will be filled at the current market price.
Now select Send.
Now, a Preview Order window will pop up for you to review your order before
confirming (good idea!). Read it and if it’s correct then hit the Confirm
button to send your order. If it is not correct, then hit the Cancel button and
correct your errors.
Place a Sell order for stock purchased (for immediate sell):
A. Select Account (same account in which the purchase was made)
B. Trade Type: Stock
C. Routing (if Routing is asked for): iRoute
D. Symbol: Stocks ticker symbol
E. Quantity: Number of shares you wish to sell
F. Action: Sell
G. Order Type: Market
H. Duration: Day
I. Condition: None
Purchase an Option:
A.
B.
C.
D.
Select Account
Trade Type: Stock
Routing (if Routing is asked for): iRoute
Symbol: Stocks ticker symbol
Now hit the Lookup:
Open an Options chain and left-click on the options ticker symbol you wish to purchase.
This will auto-populate the selected option into the Symbol window.
E. Quantity: Number of contracts you wish to purchase
F. Action: Buy To Open
G. Order Type (if you wish to go “in the spread”): Limit.
Choosing Market order will fill you at current market price.
H. Duration: Day
I. Condition: None
J. Limit Price: One third in the spread, or less.
OR
A. Select Account
B. Trade Type: Option
C. Routing (if Routing is asked for): iRoute
D. Symbol: Options ticker symbol
E. Quantity: Number of shares you wish to purchase
F. Action: Buy To Open
G. Order Type: Same as above
H. Duration: Day
I. Condition: None
J. Limit Price: Price you wish to buy at
Place a Sell order for an Option purchased (for immediate sell):
A. Select Account (same account in which the purchase was made)
B. Trade Type: Option
C. Routing (if Routing is asked for): iRoute
D. Symbol: Options ticker symbol
E. Quantity: Number of contracts you wish to sell
F. Action: Sell To Close
G. Order Type: Market
H. Duration: Day
I. Condition: None
*Can use a Limit order to Sell To Close if trying to sell in the spread.
(Use only when experienced)
Using a GTC (Good To Cancel): If I were to use this order it would be used to sell stock
and not options. The GTC would be used to set up sell orders after a purchase has been
filled.
As taught in the Market Essentials workshop, this order should be set to take profit and
set up along with a Stop Loss to exit in case the stock turns against you. The GTC and
Stop Loss would be set up together as a Conditional Order as indicated below.
Under Trade Type select Conditional as seen above. This will take you to the next screen
as seen below:
Under Condition type you will find two selections, OSO and OCO, select OCO (One
Cancels Other).
Also notice that this is Order 1. Set your GTC for profit here by:
A. Select Account (should be auto populated)
B. Symbol: Stocks ticker symbol (should be auto populated)
C. Quantity: Number of shares you wish to sell
D. Action: Sell
E. Order Type: Limit
F. Duration: GTC
G. Condition: None
H. Limit Price: Set the price for which you wish to sell at
NOW SELECT ‘NEXT’.
Order 2 will now pop up:
Now complete Order 2 for your Stop Loss (illustration above, description below):
A. Select Account (should be auto populated)
B. Symbol: Stocks ticker symbol (should be auto populated)
C. Quantity: Number of shares you wish to sell
D. Action: Sell
E. Order Type: Stop Market
F. Duration: GTC
G. Condition: None
H. Stop Price: Set the price for which you wish to sell at
HIT SEND
Read bottom window to confirm that this is your order and hit Confirm. If you made a
mistake, then hit Cancel.
ADVANCED ORDERS
1.) Basic Contingency Order. This is used to set an order to buy or sell a stock
contingent on a stock reaching a desired price. Or to open or close an option
position contingent on a stock reaching a desired price.
Contingent orders are used when you cannot be at your computer to enter or exit.
Example: it’s during the evening and you’ve chosen a stock you wish to trade
(either by buying the stock or the option on the stock) but cannot watch the
tomorrow. The Contingent order basically says, “Put me into this
position contingent on the stock reaching my desired price.”
market
Once a position is filled you can set your exits using Contingent orders.
Example entry: It’s during the evening and I want to place a trade on IBM
and I’m trading an Option. IBM has closed today at 57.16 with a high of
57.79 and I want to Buy To Open a 50 Call tomorrow if IBM trades above
todays high of 57.79. Tomorrow I can’t watch the market but I want in the
trade if IBM trades above today’s high so I’ll set an order to enter the
trade if my criteria (IBM trades above today’s high) is met; I want to
enter if IBM trades greater than 58.00 (slightly higher than the high).
Contingency orders are entered using Market orders. You can’t use
Limit orders because you won’t know where the stock’s price will be
trading at during time of entry.
See illustration below:
A.) Account: Select account number
B.) Trade Type: Contingent
C.) Item: Order
D.) Symbol: Enter option symbol. Or you can enter the stocks ticker symbol
and use Lookup to auto populate the options symbol
E.) Amount: Number of contracts you wish to purchase
F.) Action: Buy To Open
G.) Order Type: Market
H.) Duration: Day
I.) Condition: None
J.) Option Market: Default
SEND
Another window will open, the Trigger order. See below:
See how the word ‘Trigger’ is under Item. Also notice how the order reads:
A.) Item: Trigger
B.) Symbol: Stocks symbol
C.) Operator: Greater than.
D.) Price: Entry price you wish (in this example it’s 58.00)
E.) Basis: Last (which represents the last price or current price)
SEND
Notice the Preview Order window appears and it’s asking if you want to Buy To Open
10 contracts of MMM Jan 50 Call at Market price for the Day contingent on MMM’s last
price greater than 58.00. This is what we wanted so we would hit ‘Confirm’ and our order
would be sent.
You would also set an alert based on the stock reaching the entry point of 58.00. You
must place the stocks ticker symbol on the monitor screen of Real Time Markets.
Now go to the Edit Alerts button:
Open it and make sure you select the same page that the page MMM (Real Time Market’s
monitor screen) is on:
Enter 58.00 in the High column and check the E-mail box.
Before you can get an alert sent to your phone you must know your phones e-mail address.
If you don’t know it then you must contact your cell phone provider to get it.
Once you have it then call BetterTrades customer service or e-mail
support.bettertades.com with it and they’ll make sure it’s functional.
At that point you will be able to receive alerts to your cell phone.
Ok, once you receive your alert that MMM hit 58.00, you now know that your order has
been triggered and you own the option. Now you’ve got to jump on your computer and set
a Stop Loss. “Oh, I can’t get to my computer to do that,” you say. Well, this is how we
take care of that problem. Instead of using a Contingency order to enter the trade we use
a Conditional order to set an entry and a Stop Loss at the same time so that if we’re
triggered into a position our pre-selected Stop Loss order would automatically be placed
for us. This is where we would use the OSO (One Sends Other).
Here’s our example. I want to buy a Call option if the stock rises above 136.74 and if my
order is filled then I want a Stop Loss automatically placed if the stock falls below 133.00.
This is how you do it. In Practice To Profits:
A.) Account: Select account
B.) Trade Type: Conditional
(See Below)
After selecting Conditional the below window will appear:
This window is Order 1, you’ll notice OSO is listed in the Condition Type.
This Order 1 is where you will set your order to Buy To Open a Call option if the stock
rises above 136.74.
Enter Stock symbol and hit Lookup to select desired Call option for auto population.
Options ticker will then appear in Symbol window.
Now complete remaining information.
A.) Quantity: Number of desired contracts to purchase.
B.) Action: Buy To Open
C.) Order Type: Market
D.) Duration: Day
E.) Condition: None
F.) Option Market: Default
Under the bold typed word Contingent you now need to complete for contingency.
G.) Enable: Check this box
H.) Symbol: Stocks symbol
I.) Basis: Last
J.) Operator: Greater than
K.) Price: Price in which you want to enter at (our example was 136.74)
NEXT
Now Order 2 pops up. Notice how the first order is printed in lower portion of the order
screen.
This Order 2 screen is where you will enter your Stop Loss so if you get filled on your
entry your Stop Loss will be placed automatically. You see, if the first order is triggered
than the other order is sent in, ‘One Sends Other’ (OSO).
Let’s complete this second order. See below:
A.) Symbol: Options ticker, should be auto populated for you
B.) Quantity: Number of contracts you wish to sell, should be auto populated
C.) Action: Sell To Close
D.) Order Type: Market
E.) Duration: Day
F.) Condition: None
Under the bold typed word Contingent you need now to complete for contingency.
G.) Enable: Check the box
H.) Symbol: Stocks ticker
I.) Basis: Last
J.) Operator: Less than
K.) Price: Price in which you want your Stop Loss at (our example was 133.00)
SEND
Your OSO order is complete and ready for confirmation. Read the bottom box to confirm.
It says:
Buy To Open 10 contracts of Jan. 125 Call at Market for the Day at Market price
Contingent on Stock Last price greater than 136.74
OSO
Sell To Close 10 contracts of Jan. 125 Call at Market for the Day at Market price
Contingent on Stock Last price less than 133.00.
If this is what you set, you agree, then hit Confirm. If not, hit Cancel.
You set this order up the night before or any time before the market opens and it runs on
its own…you’re done! Wait and check it the next night to see what happened. If you’re in
the trade bullish and your Stop Loss was not triggered, well then, you need to set a Stop
Loss up for the next day using a Contingent order.
Once entered by way of OSO and not being stopped out, you no longer have a Stop in
place. You need to re-set it.
Let’s set up a Stop Loss using a Contingency order for a bullish position that I’m in.
Example: I was filled on my previous order at 136.74 and being that the stock continued to
rise my Stop Loss order was not triggered. So I’m in a bullish position and now I need to
set a Stop Loss for the next day. The price of my stock is at 141.00.
So, on the trading screen:
A.) Account: Select account
B.) Trade Type: Contingent
C.) Item: Order
D.) Symbol: Options ticker
E.) Quantity: Number of contracts you wish to sell
F.) Action: Sell To Close
G.) Order Type: Market
H.) Duration: Day
I.) Condition: None
J.) Option Market: Default
SEND
A.) Account: Should be auto-populated
B.) Trade Type: Contingent (should be auto populated)
C.) Item: Trigger
D.) Symbol: Stocks ticker symbol
E.) Operator: Less than
F.) Price: Set price you wish to use as Stop Loss
Our above example indicates the closing price was 141.00. You’d choose a Stop Loss price
below that amount within your comfort zone.
G.) Basis: Last
The Preview Order window will appear. Read, then Confirm or Cancel.
How about this picture? I’d like to enter this stock with a Call if the stock trades above
210.70 or with a Put if the stock trades below 198.50. You can set this type of order using
Conditional/Contingent orders.
This is how:
A.) Select account
B.) Trade Type: Conditional
The below window will appear. This window is Order 1. Complete it as follows using our
example.
A.) Account is auto populated
B.) Condition Type: OCO
C.) Symbol: Option ticker
D.) Quantity: Select desired number contracts use wish to purchase
E.) Action: Buy To Open (Call option)
F.) Order Type: Market
G.) Duration: Day
H.) Condition: None
I.) Option Market: Default
Now under the bold word Contingent:
J.) Enable: Check this box
K.) Symbol: Stocks ticker
L.) Basis: Last
M.) Operator: Greater than
N.) Price: Desired entry price (in our example it was 210.70)
NEXT
Order 2 window will appear:
Complete this screen as such:
A.) Account is auto populated
B.) Condition Type: OCO
C.) Symbol: Option ticker
D.) Quantity: Select desired number contracts use wish to purchase
E.) Action: Buy To Open (Put option)
F.) Order Type: Market
G.) Duration: Day
H.) Condition: None
I.) Option Market: Default
Now under the bold word Contingent:
J.) Enable: Check this box
K.) Symbol: Stocks ticker
L.) Basis: Last
M.) Operator: Less than
N.) Price: Desired entry price (in our example it was 198.50)
SEND
Read. Confirm or Cancel.
Ok, if the stock rises above 210.70 you will be in the trade with a Call option and the order
for the Put will be cancelled (OCO, One Cancels Other).
If the stock falls below 198.50 you will be in the trade with a Put option and the order for
the Call will be cancelled.
When placing this order you would have set alerts so you would be alerted of your entry.
Once alerted you would then go to your computer and set a Contingency order to set a
Stop Loss (how to set this was explained above on page 22).
OTHER ORDERS
Other orders such as entries into Spreads, Strangles, Covered Calls. You would select
Option Strategy under Trade Type (see below):
Once you have selected Option Strategy the following screen will appear:
Here you will select the strategy you wish to trade. You may not realize it but at this point
you really don’t need any more help placing a trade. You should have practiced enough
with what we’ve covered thus far so that when it comes to the different strategies it’ll be
easy for you to figure out…it’s simple.
If you have trouble or concerns regarding placing any of these orders, simply call support
at 1-800-676-4410.
HAPPY TRADING!