Performance Profile

Instructions

The Performance Profile helps demonstrate the key performance characteristics of an option or complex option strategy.

It comprises:

  • An enhanced Quote Details window that shows the Return-to-Risk ratio, Profit Probability and the potential Max Return and Max Loss;

  • A Performance Graph that shows the P&L (or any of the Greeks) as a function of the underlying price;

  • The Scenarios window, which displays the effects of a change in underlying price on the P&L, the Greeks (either the Instrument Greeks or the Position Greeks) and the volatility of a position.

To Open the Performance Profile

You can open the option Performance Profile tool several ways:

  1. From Mosaic - From the New Window drop down select Performance Profile.

    From Classic TWS - From the Analytical Tools menu select Performance Profile.

    • You may also Right-click a strategy from the Portfolio or other tool and select Analytical Tools > Performance Profile.

    • From within the Order Entry panel for a strategy, set order parameters and click the Advanced icon. Click the Margin/Performance button and ensure that Performance Profile is checked.

    • Within the Strategy Builder, click the "Profile" button below the strategy.

    The Prformance profile window in TWS.

Click the link to open the Performance Graph as its own window.

Notes on Performance Profile

  • Performance, P&L numbers and P&L chart are computed as of the earliest expiration date.

  • After nearest date leg expires, you might be exposed to losses exceeding shown Max Loss.

  • For multi-expiry combinations, Performance Profile values may vary within a potentially wide range that is not reflected by the clean lines in a graph. In extreme cases, driven by the volatility of its later-expiring legs, this may result in flipping of the sign (from + to – ) changing what appeared to be potential for profit to an actual loss.

In the example below, see how the potential for loss increases significantly when the first leg of a combination order expires.

In the first image, the two-legged combo shows a potential Max Loss of $411.00. In the third image, once the nearest expiration has expired, the potential Max Loss has increased to $2545.00. This is just one example. You may experience larger losses in extreme cases.

Samples of the performance profile in TWS.

 

Additional Resources

Learn About Performance Profile in Trader Workstation at IBKR Campus

Visit the Trader Workstation Website