Select Which Trades to Place

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How to Place an Option Trade

Introduction

Options provide investors with the ability to lock in a price to buy or sell an underlying security at a specified time in the future.

The higher level of risk associated with options makes them an investment best suited for sophisticated and very knowledgeable investors. Options should only be purchased by investors who have a good understanding of how they work and how they can enhance a portfolio.

To place an option trade, select Trading from the left-hand menu and then choose Trade Options.

You can also place an options trade directly from Account Holdings, My Quote Lists and from your Watch Lists.


NOTE:
You must have option trading privileges added to your CIBC Investor’s Edge account prior to placing any orders. Contact a CIBC Investor’s Edge Investment Representative to find out how to add option trading privileges to your account.

Step 1

1. Select an action from the dropdown menu, enter the option symbol and choose the applicable market.

  • If you don’t know the option symbol, you can look it up using the Symbol Search link.

2. Click on Select Symbol to generate the Option Expiry, Strike Price and Option Type fields.

  • Once you select an Option Expiry or Strike Price, the dropdown menu for the remaining fields will be automatically updated to include only valid selections.
  • You can also get a real-time quote for the option you want to trade by clicking on the Get Real Time Quote button. The quote will populate on the right-hand side of the page.
  • Click on the question mark icons for more information about any of the terms used on the Option Order Entry page.

NOTE: If you select the U.S. market, but choose to pay from a Canadian bank or brokerage account, foreign exchange rates will apply.

Step 2

1. Before submitting your order for processing, you can review all of the trade details, including an estimate of the total cost of the trade.

2. Once you have confirmed all the details of your trade, enter your trading password and select Submit Order.

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  • You can save your trading password for the current session if you are planning on making multiple trades.

Step 3

After submitting your order, you will receive confirmation that the order was successfully submitted, along with an order tracking number for your reference. You may wish to print this page for your records.

  • You should also verify the status of your order on the Order Status page.

NOTE: The settlement period for options is the transaction date plus one business day (T+1).

Order Status

You can view your recent orders, including orders submitted today, and any Good Through orders that have not yet been filled. Additional details are also available for any orders that have been filled or rejected.

You can change or cancel any open or partially-filled orders. Orders that are “pending” or “next day” can be cancelled, but cannot be changed.

Other Resources

CIBC Investors Edge allows for option trading on all North American equity markets. Covered positions can be sold (or “opened”) online, but naked/uncovered positions can only be placed with an Investment Representative. You may also contact an Investment Representative for spreads and straddles, and any other of the more complex option strategies.

Our Quotes and Research section allows you to see all the options available for an underlying security and you can even track individual option quotes in your Watch List.

Below are some common terms associated with options:

  • Covered: Selling an option while holding the underlying stock at the same time.
  • Naked: Selling an option when you do not hold the underlying stock.
  • Opening: When taking a new position with options you are considered to be opening the position.
  • Closing: When you are offsetting the position, which is either buying back the sold option or selling the bought option, you are closing the position.

When you invest with CIBC Investor’s Edge, you will benefit from low commission rates on online and mobile equity trades.

How do you trade intraday? What are the parameters to look for while choosing stock and how do you stop loss in that trade?

a KgO d wK RFbir b w y EiGjo nI R po a kJc g n i w n DNYwR g l t B Ram u eI l t l UyXo , T OEA L B L cOL C Z

Intraday? – It’s the toughest chapter of trading and just to warn you in my initial days I have lost 50% of my capital just by following some links and getting trapped by so called investors and advisors

But, It’s doesn’t mean it’s not worth it.

I personally stick to break out startegy which most of the time works for me and I am getting some good profits.

by Worden

How To Place an Option Strategy Order from a WatchList

An order ticket for any option strategy can be generated from any Symbol in a WatchList. These steps demonstrate how to place the order which uses the standard order ticket. The steps will work with any of the Options Strategies.

1. Right-click on the symbol in the WatchList for which an order will be placed

Select Trade Option Strategy from the drop down menu

2. Select Desired Option Strategy from the Menu

For this example, the Long Call Spread is used

This opens a standard order ticket with the fields pre-filled based on the user-defined default option buy ticket

The order ticket contains:

  1. Contract details for both options (action, date, option type, strike price, premium)
  2. Expiration dates (dropdown and grid)
  3. Order type
  4. Order price (net premium)
  5. Spread (natural-far)
  6. Quantity
  7. Duration
  8. Cost of trade

If no changes are desired, simply click Buy to Open Call Spread and confirm to place the order.

3. Select Expiration Date

Change the expiration date either to closer or further dates using the arrows

Alternately, select a specific expiration date from the drop down menu

4. View available strike prices

Use the spinners next to the option leg(s) to move up or down through available strike prices for the selected expiration date.

5. Select the order type desired for the contracts

Either leave the order set on Limit, or select a different order type from the drop down menu.

Using a Market order will allow the order to get filled but will remove any entry price control.

6. Set a Limit Price (optional)

The Limit slider shows the spread between the natural (in this case, the ask) and the far (in this case, the bid). To set a price (net premium) within the spread at which to place your order, click at any point on the slider. The limit value is seen in the price field next to the “Lmt” order type.

7. Use a Step to Limit order (optional)

Another way to take advantage of the spread is the Step to Limit order. Choose the Step to Limit order from the drop down menu. (A Step to Market order acts the same as a Step to Limit order except that if no preferable fill is achieved during the step period, the order then moves to the Market price.)

Set the beginning of the slider at the limit price desired for the initial order. This will be the limit price at which the order will be entered.

Over the predetermined time period the limit price (net premium) will be automatically modified up from the initial entry price toward the Natural (or selected) price. The step to limit order will attempt to secure a preferable fill price in this process. Modification stops if no preferable fill is received and the limit price reaches the Natural.

8. Set the quantity

Select the number of contracts for the order. (Note: remember a single option contract normally controls 100 shares of stock.)

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