Options trading has exploded in popularity over the last few years. As more retail investors look to options to hedge risk or speculate on market moves, exchanges like BetPro that offer these derivatives become increasingly important. However, options chains can seem complex and intimidating to novice traders. This article will provide a comprehensive yet accessible overview of BetPro Exchange’s options offerings to help you trade options safely and profitably.
Introduction to Options and Options Chains
Before diving into BetPro’s specifics, let’s ensure we have a common understanding of options and options chains more broadly.
What Are Options?
Options are financial derivatives that give buyers the right, but not the obligation, to buy or sell an underlying asset at a predetermined “strike” price on or before a set expiration date. Calls provide the right to buy, while puts provide the right to sell.
Key Components of Options Contracts
The key components of options contracts include:
- Underlying security
- Expiration date
- Strike price
- Premium/price of the contract
- Contract size (typically 100 shares per contract)
What Is an Options Chain?
An options chain is a listing of all available option contracts for a particular underlying security. Options chains display vital data like:
- Expiration dates
- Available strike prices
- Bid/ask prices
- Volume
- Open interest
Now that we’ve covered the basics, let’s explore BetPro’s specific options offerings.
Overview of Options on BetPro Exchange
BetPro Exchange allows traders to buy and sell options on a wide variety of securities. Here are some key things to know:
Eligible Underlyings
BetPro offers options on popular stocks, ETFs, indices like the S&P 500, and even some cryptocurrencies. All the major names you’d expect are likely available.
Expiration Cycles
BetPro lists standard monthly expiration cycles going out 6+ months. There are also weekly options available on highly liquid underlyings.
Strike Price Intervals
Strike price intervals vary depending on the underlying, but are generally $1 apart near the current price, $2.5 or $5 apart further out of the money, and $10+ apart deep out of the money.
Liquidity
Liquidty and spreads are excellent on all but the most exotic options. Retail trading activity brings tight markets that facilitate easy entries and exits.
Now let’s walk through actually analyzing BetPro’s options chains.
How to Read BetPro Exchange’s Options Chains
Accessing the Chains
Pull up a quote page for any underlying security on BetProExchange.com and click the “Options” tab. This will display the options chain. On mobile, click the icon that looks like a horizontal bar chart to view the chains.
Key Data Columns
Many data columns will populate, including:
- Strike – The strike price of each available options contract.
- Calls/Puts – Separate call and put options at each strike.
- Expiration – The expiration date of each contract.
- Bid/Ask – The current bid (sell) and ask (buy) price of each option. The spread between represents liquidity.
- Volume – The number of contracts traded over a set period of time, often today.
- Open Interest – The total number of open positions held by all traders in a particular contract.
And more specialized columns the deeper you dig.
Filtering and Customization
Use filters at the top to quickly isolate specific contracts by date and strike. For example, filter to only show January monthly calls with strikes below $100. Customize columns and arrange however suits your trading style.
Greeks and Probability Calculators
BetPro also provides live calculations of options probabilities and the “Greeks”, which measure an option’s sensitivity to various market factors. These help traders evaluate contracts.
Now let’s jump into utilizing BetPro’s options chains to identify trading opportunities.
How to Use BetPro’s Options Chains to Find Opportunities
Below are three common ways traders analyze options chains to spot potential trades:
Review Volume and Open Interest Trends
Look for surges (or unusual declines) in volume and open interest for particular contracts. This signals increased positioning and more liquidity. Check news and charts to understand why traders are flocking there.
Assess Support and Resistance Levels
Identify key technical levels in the stock that align with round number strikes in the chain. These tend to draw more interest as either breakout or floor levels. Monitor bids and ask prices around these strikes.
Evaluate Sentiment With Put/Call Ratios
Compare put volume/open interest relative to calls. If puts dominate, it signals bearish sentiment. If calls dominate, it signals bullish sentiment. Fade the extremes when sentiment becomes stretched in one direction.
These are just a few quick examples of analyzing chains for opportunities. Let’s turn now to trading specifics.
Trading Options on BetPro Exchange
When ready to trade, navigate to specific option contracts using the quote pages and options chains. Then enter bids and asks using the intuitive order ticket.
Order Types
Leverage order types like limits and spreads to control risk and pricing. Use contingents like stop limits to auto-trigger based on price action in the underlying.
Margin and Buying Power
Understand that options have lower margin requirements than stocks, but still require collateral. Manage buying power carefully when scaling positions.
Exercise and Assignment
Close options positions before expiration to avoid exercise into stock positions. Use early exercise only for dividends or special cases when optimal to take shares.
Settlement and Fees
Options settle next day. Fees run just $0.50 per contract with volume discounts available. Manage trading size appropriately to capitalize on efficient pricing.
That covers most of the key points for now. Let’s wrap up with some FAQs.
Unlocking BetPro Exchange’s Options: FAQs
Here are answers to some frequently asked questions around trading options on BetPro Exchange:
What are some tips for new options traders on BetPro?
Start slowly, stick to liquid contracts, master the tools, screen for basic opportunities, and keep position size small as you learn. BetPro offers a robust options platform but every trader must learn risk management.
Does BetPro display full Greeks and probabilities data?
Yes, BetPro provides live calculations of all the Greeks – delta, gamma, theta, vega, and rho. They also share up-to-date probabilities of options ending in-the-money based on cutting-edge modelling.
Where can I get additional help understanding options?
Check BetPro’s Options Playbook for deep tutorials. You can also take their free Options Crash Course which walks through examples of screening chains, evaluating Greeks, and assessing probabilities using their tools.
What trading permissions do I need to trade options on BetPro Exchange?
You at minimum need a margin account approved for spreads trading. Some advanced strategies may require higher options levels approval based on experience and account activity.
Does BetPro offer tools for creating spreads and other complex positions?
Yes, navigate to the Spreads ladder to combine multiple legs including iron condors, calendars, butterflies, and more. Use smart order routing for quick fill pricing.
I hope this overview has provided a deeper understanding of how to access critical options data through BetPro Exchange’s intuitive chains and harness that information to uncover smart trading opportunities suited to your investing goals and risk tolerance. Options offer versatility but also complexity. Master the fundamentals, stick to liquid products, control position sizing, use orders wisely, understand Greeks/probabilities, and keep digging into educational resources.