Hello Guys. I would like to trade options on indices/etf/commodities/currencies with very high leverage. The famous brokers i know of all offer very low leverage. This is because of regulations in the US. Brokers like Td Ameritrade, E-trade, Ibkr e.t.c all offer leverage of about 2:1 on naked options. When i say high leverage i mean i need a leverage as high 50:1 or more. Or a minimum/worst case of 20:1. Now i was able to find an alternative. So i have to use options CFDs. The brokers that offer this includes: saxo, ig, easy markets, plus500, activ trades, avatrade, city index, lcg and swissquote. Well this are the once i know about.
So here it is. I would like to place limit and stop orders on my options trade but based on the underlying spot price value. Random Example: So let’s say i bought a call option on tsla for 15$ at a strike of 800 expiring in a week. And the current price of tsla is 800. I would like to place a take profit order when tsla jumps to a price of 870 and a stop loss if price drops to 795. I don't really care what the price of my option is i only care to close my options position as soon as the underlying reach a certain price. And not even a single options CFD broker i mentioned above offer it. Thinkorswim offers this and you can even close trades based on time to expiry(can you imagine how advanced it is) but however margin requirement of course make no sense(very low leverage) because it is based in the US. Same with most non CFD US brokers.
So my question is this: I need to be able to place stops/limit orders on any of the option cfd brokers above. I came up with three possible solutions below. 1. buy/create a program/bot that can already do this on any of the above brokers( do you have any suggestions) ? Or maybe using scripting programs like autohotkey to write a script that auto clicks a particular portion of my screen(to confirm to open a stop or limit order) when a price trigger is hit ? 2. Probably the easiest and my favorite choice. Is there an alarm app that alert me on my phone when price hit a target even in my sleep so i can wake up and manually close my trades? Please i don't mean price alert apps. I have tried almost all and it failed me. I mean an app that plays a long ringtone as annoying as an iPhone alarm. So that no matter what i doing i am aware my trigger price was hit. 3. Yeah this is probably my least favorite choice, because i am a beginner in programming. Is there a way the API of this brokers can help me; by linking it with other softwares or writing a code ? Please you can cast your vote in the poll above. But please can you explain the reason behind your votes? All suggestions are highly appreciated. Thank you.
Never forget that a stop order becomes a market order when the stop price is reached/breached. When the market is moving fast, you will not get out at your specified price. With that kind of leverage, even a relatively small downspike, and you will get margin called. That being said, option 3. Run the script on my linux rig and snooze... but I'm a Programmer, so easy for me to say. Honestly this sound like a great way to "blow out your account," in the classic sense. Maybe better to try your luck in Vegas.
Well it is not about the leverage. 20 to 1 is not all bad if you know what you are doing. And i have backtested my strategy now for months. Even in market declines. The most important this is me to be able to set a stop loss on an options(not based on the options price but based on the underlying).
I'd like to nominate this for the #1 belief guaranteed to blow up your account. It's equivalent to "hey, y'all - watch this!" Tip: if you "know what you're doing", then trading at high leverage with no effective way to instantly fire off your stops is something you never do. Yep, that's part of the standard "explanation" that precedes the explosion. Any reasonable trading platform will either have this built in or allow you to script it. The fact that yours don't - or that you lack skill to do so - further underlines the point that you don't "know what you're doing". In short: this is a really bad idea, and your should study trading until you figure out why.
Learn the API for Interactive Brokers and write an algo to monitor prices and submit your orders. Start with Python. IB API guide: http://interactivebrokers.github.io/tws-api/ Example: http://interactivebrokers.github.io/tws-api/basic_orders.html