It was a dark and stormy afternoon as thunder reverberated throughout the skies and rain continually showered the window pane. High winds shook their homes and fear raced through the traders’ minds that the power would go out any minute, all the while mayhem ensued at the New York Stock Exchange. Then a lightbulb went off, mentally speaking.
Okay, so that’s not exactly how Option Party got its start. But it made for an interesting introduction, right? In truth, our co-founder Chris Ruszkowski sat down with our other co-founder Jason Hardy to show him a spreadsheet model he had put together for options trading. With sheet after sheet, it was clear Chris was onto something. That’s when Jason threw out the idea of building a platform and putting it online. Thus, Option Party was born.
There was still a lot of work to do, though.
From Idea to Working Platform
There was one problem: For all the work it took to compile the data, there was no way to compare one strategy to other strategies. Ultimately, the once-complicated series of spreadsheets turned into an easy-to-use software capable of scanning thousands of different option combinations in seconds.
Think about how you personally find options trades right now. If you’re like many, you have a go-to list of stocks to trade. Maybe these are your favorite names. Maybe the list changes based on certain trade setups. Either way though, we have to decide on the directional bias (bullish, bearish or neutral) and then start manually digging through all the different strike prices and expirations to find a strategy.
This can be a laborious task, even for just one stock. Even when we know the directional bias we’re using, comparing different strategies can be difficult. Which offers the better risk/reward, the bull call spread or the bull put spread? It depends on the situation and that’s what makes it difficult. Option Party removes this step. It scans for as many strategies as you want at once, but also ranks them by which is best. Known as Party Rank, it can tell traders within seconds what the best setup is available in the market.
Just like in trading, Option Party continued to evolve and improve through experience and practice. For instance, it didn’t take long to realize that not all traders could or would want to sit in front of a screen all day. Thus, Option Party notifications were introduced with Opportunity Alerts.
In a nutshell, the platform can constantly scan for multiple strategies throughout the trading session. When opportunities arise, the trader is notified. The great thing about Opportunity Alerts? You can have more than one. In fact, you can have all sorts of screens running simultaneously — bullish, bearish, neutral and multiple strategies for each one. You could be golfing or working and get the alert that now’s the time to take advantage without staying glued to a monitor.
Features, Features, Features
From Day One to today, there has been a slew of new features introduced. There’s scanning by Stock Stats, which includes P/E ratio, market cap, volume and 52-week highs and lows. There’s Stock Financial filters, which allows investors to screen by dividend yield, earnings growth and a company’s debt. You can scan by in-the-money and out-the-money or filter trades by only looking for (or solely excluding) ETFs.
The Option Party team has continually found ways to better the system. But which is their favorite and which are they most proud of?
“I’m most proud of the Earnings Announcement and Ex-Dividend Date filters,” says Chris. “They work well at reducing risk by allowing users to easily remove the earnings season from their trade ideas — or if you’re seeking to capitalize on large potential moves, you can easily find trade ideas that will be affected by an earnings announcement.”
As for his favorite? It has to be Option Party’s overhauled implied volatility filters. “Because the market normally over-prices moves, I find high IV Ranks as an easy way to look for opportunities,” Chris explained.
More to Come
Building on the current features and risk/reward attributes, Option Party isn’t resting on its laurels. Instead, the team is busy working on portfolio management tools to help investors manage their trades after doing the legwork to find it. From paper trading to actual account management, Option Party is focused on the future.