Great! You did a short premium trade, and you want to live a life away from your platform. Rather than stare at your trades to manage winners, why not let the platform do the work for you? We all manage winners differently, and the tastyworks desktop and web-based platforms can help you lock in winners at various profit targets, such as 50%.
- % of max profit for credit spreads
- % of max profit for debit spreads
- Desktop platform
- Web-browser platform
% of max profit for credit spreads
Profit based on the total credit received
Setting closing orders at a % of Max Profit means that you’ll no longer have to manually figure out what 50%, or whatever %, of your credit received, is for any given trade.
For example, if you sold an iron condor for a $3.00 credit and you input a “Close Profit %” at 50% then the platform will create a closing order to buy the iron condor at a $1.50 debit, effectively capturing 50% of the iron condor’s max profit.
% of max profit for debit spreads
Profit based on the spread width and debit paid
On the other hand, if you bought a $10-wide debit spread for $3.00 debit then placing an order for 50% of max profit would line up an order for $6.50 credit. That is because the max profit on a $10-wide debit spread that cost $3.00 is $7.00 ($10 width - $3 debit = $7 max profit). 50% of your max profit is $3.50 ($7 x 50%). Since the feature is lining up an order based on a percentage of max profit the order ticket would display a closing order for a $6.50 credit for max profit ($3.00 debit for spread + $3.50 = $6.50).
*Please Note:The % of Max Profit feature will not take into account any rolls. You will need to manually calculate your initial credit received and with any roll(s) performed. “Close Profit %” will only take into account the current position's trade price.
If you already know how to line up a closing order, then you’re halfway there. If you do not know how to line up a closing order and want to learn more about it, then please click here.
To learn more about different closing order types, please click here.
To learn more about GTC, GTD, and Day orders, please click here.
- Open the Positions tab to view your positions. Locate the options position you would like to enter a profit target %.
- Locate and click on the symbol group to expand and view your options positions. In the example below, we are entering a 50% profit target on a short call spread (vertical) on GOOGL where $1.70 was collected.
- Once the symbol group expands and displays your current position, highlight each leg by left-clicking it.
- When all legs are highlighted, right-click anywhere within the highlighted area. A closing menu pop-up menu will appear:
- Designate your profit % by using the arrows within the menu, or you may manually enter a profit % by clicking on the number:
- Click the circular blue arrow icon after designating a Closing Profit %.
- After clicking the blue arrow icon, you will be sent to the Trade tab where an order ticket at the designated profit % will populate. By default, the Time-In-Force (TIF) will be a GTD order that expires the day after the option’s expiration date. You can also change your TIF within the order ticket if desired.
- If everything looks correct, then you can click Review & Send to review the order and then Send it.
Trade Tab Order Ticket @ 50%
- Enter the Portfolio tab by clicking the Portfolio icon along the left-hand column.
- Locate and click on the symbol group to expand and view your options positions.
- Once the symbol group expands and displays your current position, highlight each leg by left-clicking it. A pop-up menu will appear above your position:
- After selecting your positions click the orange “Close @ Profit %” button: .
- A menu will appear indicating the percent profit. The default target profit percent is 50. You may designate your profit % by using the arrows within the menu, or you may manually enter a profit % by clicking on the number. Once a profit % is designated, please click “START CLOSING ORDER.”
- After clicking “START CLOSING ORDER,” you will be sent to the Trade window where an order ticket at the designated profit % will populate. By default, the Time-In-Force (TIF) will be GTC. You can change your TIF within the order ticket if desired.
- If everything looks good, then you can click Review & Send to review the order and then Send it.
The animation below walks through the steps of lining up a closing order at a target profit percent. The example walks through entering a 50% profit target on a short put spread (vertical) on TSLA where $1.11 was collected.