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Scenarios

A trade is rarely one decision. You enter, then plan what you would do if the market goes against you or if you have made most of the profit: hedge at a price, take half off at a P&L, close at 2 DTE. A scenario is one of those planned steps: a set of modeled legs you can look at on the risk graph without trading them. A condition is the “when” you attach to it. Tented watches the condition in the background and tells you when it holds. It never places an order; you review the step and commit it yourself.

The Sep 23 put BWB's Trade builder with three scenarios, the hedge scenario expanded showing its condition line and its Commit, Duplicate, Adjustment, Copy and Edit condition buttonsThe Sep 23 put BWB's Trade builder with three scenarios, the hedge scenario expanded showing its condition line and its Commit, Duplicate, Adjustment, Copy and Edit condition buttons

The put BWB's builder: three planned steps, the first expanded to show its condition.

  1. 1 Scenario row with Plot checkbox
  2. 2 When SPX ≤ 7,590 for 2 min
  3. 3 Add a step after this one
  4. 4 Commit this scenario

How traders use it

Section titled “How traders use it”
  • Pre-plan a hedge. On the Sep 23 put BWB, the scenario “Hedge with a 7580/7540 put spread” waits for SPX ≤ 7,590. When it is met you open the trade, look at the curve with the hedge on, and commit.
  • Pre-plan an exit. “Take half off” waits for P&L ≥ $2,000 and “Close at 2 DTE” waits for the date, so neither needs you at the screen.
  • Compare two repairs. Model a roll and a hedge as two scenarios, tick both in Plot and read which one leaves the better worst case.
  • Plan a step at a price. Use Adjustment to model what you would do after a move to 7,590, priced as if the move had happened.
  • Take it to thinkorswim. Copy a scenario as a thinkorswim order and paste it there.

Articles

Section titled “Articles”

If a condition is not watched or did not fire, see Condition isn’t watched or can’t be saved and Condition didn’t fire.