Let's say that you have already established a multi-leg options position. Now you want to close one of the legs of that position. That is what traders commonly referred to as Legging-Out.
Since the eDeltaPro Options Trading platform is all about handling your trading positions as a uniform group, some users have asked us how do I accomplish partial closing and partial additions to existing positions? In other words, how do I "leg in" and "leg out" of an existing strategy?
And as we are going to see, there are a couple of ways to accomplish legging in eDeltaPro. First, in this video, we are going to cover just the legging-out. That is closing legs to an existing position. Then, in a second video, we will cover in detail the legging-in process.
So the best way to see this in action is by using an example. Let us assume that you already have a strangle in your positions. And for some reason, you want to close just the call side of the trade. First, look for the Strangle on the positions report. Once you have it, open the position to reveal the legs. You can see here the Put and The Call of the strangle. Use the menu on the right for the Call that you want to close. Select "close" from the menu. This selection will take you to the all-in-one trade ticket. Here you can see your existing position, and the already populated contract tab to close the current Call. Note that the platform has already filled out the quantity with the units corresponding to the existing trade. Next, you need to fill in the price and send the order. You are ready to.
There is a second method for partially closing legs on existing positions. This time we are going to use an iron condor. Say you want to exit the Put side of this iron condor. So this time, you need to close two contracts and not just one. Here is the Iron Condor we want to leg out. This time we are going to work at the strategy level. From the menu, click the "Close" option. The all-in-one trade ticket will show you all the contracts you need to trade to exit the whole position. But since we only want to close the Put side, there is no need to trade the Calls at all. So with the mouse over the Call contract's tab, we see the X appear. We click the X to eliminate the tab from the order. We do this for both Calls contracts and eliminate both of them. Now we only have the Put side on our order.
Note that the quantity is already filled-in, and corresponds to the number of contracts of the existing position. Give a price to your order, and voila. Your order is ready to go. Preview the order. On the Order Confirmation page, you can see that the order is now for closing both Puts contracts of the Iron Condor. Send the order. As soon as the order gets filled, you will effectively leg out your iron condor's Put side.