The Performance Profile helps demonstrate the key performance characteristics of an option or complex option strategy.
- 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:
- 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.
Find out how 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.