Interactive Brokers Adds Protective Collar Option Strategy in TWS Platform
Interactive Brokers has introduced a new options trading feature on its Trader Workstation (TWS). The firm has added the Protective Collar options strategy to the Strategy Builder within the Option Chain. It expands the range of structured strategies available to clients.
What is New in the TWS Platform?
The Protective Collar options trading strategy is now available inside the Strategy Builder of the Option Chain. It lets clients build and place this strategy without manually selecting and combining individual option legs outside the tool.
Purpose of the Protective Collar Strategy
This strategy is for clients who already hold an existing position. It helps limit potential losses beyond a certain level. Also, it sets a cap on the upside. In simple terms, it offers downside protection in exchange for limiting how much profit one can make if the position moves favorably.
Where the Strategy is Available
The strategy can be accessed through the Option Chain in the TWS platform. Mosaic and Classic TWS layouts support it, using the Strategy Builder feature.
How to Access the Protective Collar Strategy
- In Mosaic, users need to click the New Window button in the top left corner and select Option Chain.
- In Classic TWS, users need to click the Trading Tools button at the top of the page and select Option Chain.
- Users must enter an underlying symbol in the top left corner of the Option Chain window and press Enter. The Option Chain for the selected product will then appear.
- The Strategy Builder can be toggled on from the bottom left corner of the Option Chain window.
- Within the Strategy Builder, users can open the Strategies drop-down menu located in the right corner and select the Protective Collar strategy.
- The required option legs are selected directly from the Option Chain to apply the Protective Collar strategy.
- Once selected, the order ticket automatically populates below the Option Chain. Users can make any necessary changes before submitting the order.
- After submission, an additional order preview appears. Place the order by reviewing the details and selecting Override and Transmit.
About Interactive Brokers
Interactive Brokers (IB) is a global brokerage firm. It provides trading platforms to trade stocks, options, futures, forex, bonds, and funds. IB has low-cost trading, comprehensive market access, and decisive analytical tools. Also, it provides real-time pricing and risk management on trading floors.
Wrapping Up
Interactive Brokers has made it easier for clients to implement a defined-risk options strategy directly within TWS by adding the Protective Collar strategy to the Strategy Builder. The update streamlines execution and keeps all steps inside the existing Option Chain workflow.
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