Continuing the discussion on how to execute different trades, we will move on to more Advanced Option Strategies such as two legged and three legged strategies which help in Cost Basis Reduction. 

To place an Spread Order through your Trading Block account follow these steps:

1. Click on the Trade tab. In the next few steps, enter a basic market order for any company.

2. Specify the type of Option Spread Order to use like Vertical, Calendar, or Butterfly.

3. Select whether you would like to place an order to Buy or Sell. For this example, we will place a Buy order.

4. Next, type in the number of contracts you would like to purchase.

5. After entering the number of contracts, enter the Option symbol for both legs of the order.

6. Now select the Order Type. The different types of Order are:

a. Market Order: This will execute the Order immediately at the current market bid or offer.
b. Limit Order: Will ensure that the order is being executed at a Limit Price of your choice, by executing at a price you specify.
c. Stop Order: Will trigger order to exchange once the market reaches a price of your choice. Stop Orders are very popular during sell-offs, as it makes sure that you are getting at least a price of your preference, thus minimizing losses on your Position.

* Avoid Market Orders and use Limit Orders instead.

7. The final step is the ‘Time in Force or Duration’ you would like to place on your order type. Since Market Orders can be good only for that particular day, usually, especially when you want to close a position, you have put a criteria such as the GTC (Good to Cancel) Order, indicating that you are waiting for your Limit Price to get executed, even if it takes more than a day to do so.

Mechanics of the order entry

 In order to place a trade:
• Enter a Symbol for both the legs
• Select the Expiration Date.
• Select the Strike Prices for both legs.
• Enter the number of contracts.
• Specify the Order Type.
• Select the Duration.

Points to Consider

• Avoid Market Orders.
• Select the Expiration Month based on your time horizon. Having 50-75 days until Expiration is ideal.
• Specify the Strike Price based on the Probability Calculator.
• Place GTC Limit Order to suit your Trading Plan.
• Review all your Open Orders on a daily basis.
• Adjust Limit Prices to capture your Target Gain.
• Place Limit Orders to minimize your losses.