Hello all. How can one attach a take profit and stop loss to a filled broken wing butterfly spread on IB TWS? As usual, inothing is straight forward on IB TWS, and I have searched the web and not found a solution that works! Thank you
Since the option strategy is already filled, you cannot attach anything any more. However, what you can do is to enter a limit order (your take profit) with OCA group as "OneCancelsAllNumber1" (or any other name) and a stop limit order (your stop loss) with the same OCA group name. Of course, the order columns should contain "OCA group". If not, right-click on "Action" or "Quantity" header, then select "Customize Layout", select "Order columns" tab, filter by entering oca, select OCA group, click on Add. OCA group should now appear in the order columns. If the take profit order is filled, the stop loss order is canceled and vice versa.
Usually when I open a spread then IB list the spread and I can see the legs under it. When I click on the spread I can close it (add a TP or SL) otherwise you might be able to replicate its inverse and use OCO to close either at a loss or at a profit.
Many thanks for the replies guys, much appreciated! I might have found a way to do it (waiting to see what happens when target or stop loss is hit). By right-clicking on the order, selecting Order Entry Panel > Advanced buttton > Attach Stop Loss/Profit Taker/Bracket > ticking both Profit Taker and Stop Loss check boxes > entering the required values > submit.
I don't know if there is a better way to use stop loss with options. I used stop orders a few times and once got an early fill. I mostly trade with limited max risk and cover manually if I have to. Stop limit might avoid early fills but the risk is that it trades through without filling the order.
Please pardon my ignorance, as I am just learning about spreads, and I am a bit confused how to close out (target or stop loss) a Put BWB. If, for example, using IB TWS, I placed a Put BWB on the SPX (bought 1 x Put 5780 strike, sold 2 x Puts 5840 strike, and bought 1 x Put 5870 strike) for a credit of $3.60. My understanding (I might be wrong) is I have sold the spread, and to close it, I have to buy it back However, on TWS, when I right-click the spread to close it, its defaults to SELL, with negative figures in the limit price field. I am a bit confused! If say I want the spread to close when the price is $0.60 (target), or is $7.60 (stop loss), do I sell the spread (this is what TWS is defaultng to) or buy the spread (my understanding), and what values do I put for the prices (-0.60 or 0.60 for target, and -7.20 or 7.20 for stop loss)? Many thanks!
You bought the combo, for a credit. To close it, you sell it, for a debit. That debit can be negative. IB default is correct. As your take profit, you should enter a limit sell at -0.60 (debit) And for your stop loss, a stop order to sell at -7.60 Check margin to confirm that it all matches expectations before sending.