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Fidelity’s Hidden Gem Option Tools Webinar Presentation

Presented by Trading Strategy Desk

Fidelity Brokerage Services, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917. © 2016 FMR LLC. All rights reserved. 758174.2.0

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Disclosures Options’ trading entails significant risk and is not appropriate for all investors.

Certain complex options strategies carry additional risk. Before trading options, please read Characteristics and Risks of Standardized Options, and call 800-544- 5115 to be approved for options trading. Supporting documentation for any claims, if applicable, will be furnished upon request.

Examples in this presentation do not include transaction costs (commissions, margin interest, fees) or tax implications, but they should be considered prior to entering into any transactions.

The information in this presentation, including examples using actual securities and price data, is strictly for illustrative and educational purposes only and should not be construed as an endorsement or recommendation.

Greeks are mathematical calculations used to determine the effect of various factors on options.

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Goals of Today’s Presentation

In today’s presentation, we will review some of Fidelity’s options tools and show how options traders can utilize them.

What we will cover: – Introduce some of Fidelity’s options tools – Provide insight as to what the tool is displaying/calculating – Show how these tools can help to analyze, place, and manage your options trades

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First, the basics… Start by answering these questions: • What are you trying to trade?

– Events (earnings, news, or a product release)

– Trading a trend or chart signals – Trading a volatility outlook

• What is your outlook? – Bullish, Bearish, or Neutral

• What is the timeframe of the trade? – Short, Intermediate, or Long Term

• What is your exit strategy? (profit and loss targets) – Risk/reward ratio – Technical analysis signals on the charts – Dollar or percentage amount gain/loss

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Finding Option Trading Opportunities Fidelity.com • Market Scanner* • Strategy Ideas* • Report Finder†

• Intra-day Trade Ideas† • S&P Best 10† ATP • Filters* • Custom Filters*

†Provided by S&P Capital IQ * Provided by LIVEVOL, Inc.

*Fidelity.com Trading Ideas – For Illustrative Purposes Only

*ActiveTrader Pro – For Illustrative Purposes Only

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Options Analysis Tools

• Options Statistics – Volatility analysis – Intraday trade analysis – Gauge market sentiment

*Active Trader Pro – For Illustrative Purposes Only

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Option Analysis Tools • Today’s biggest trades

– Intraday trade analysis – Green trades depict executions at ask price or higher – Red trades depict executions at bid price or lower – Other trades show executions between bid and ask prices

*Active Trader Pro – For Illustrative Purposes Only

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Option Analysis Tools • Option Chain

– Volatility analysis – Intraday trade analysis – Risk analysis (option greeks)

*Active Trader Pro – For Illustrative Purposes Only

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Option Analysis Tools

• IV (Implied Volatility) Index – Volatility analysis – Shows IV and HV (Historical Volatility) for the

past year – Displayed in chart and spreadsheet

formats

*Fidelity.com Volatility Data – For Illustrative Purposes Only

Check out What you need to know about volatility in the learning center>archived webinars.

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Option Analysis Tools • Probability Calculator

– Probability analysis – Analyze various strikes, expirations, and probabilities based on statistical analysis

*Active Trader Pro – For Illustrative Purposes Only

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Option Analysis Tools • Profit/loss calculator

– Overall analysis of trade in your account, or trades you are considering – Provides theoretical value of the option(s) based on your inputs

*Active Trader Pro – For Illustrative Purposes Only

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Option Analysis Tools • Strategy Ideas in ATP

– Backtest covered calls and cash covered puts

– Customization of several factors – Look back and see how each

strategy would have performed over the past 2 years

*Active Trader Pro – For Illustrative Purposes Only

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Options Analysis Tools • Option Summary page

– Expiration, position, or strategy – Customization capabilities

• Directed trading options – Displays top of book quotations for different exchanges

Tools can only take you so far. Have a trading process in place

including an EXIT STRATEGY!

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Key Takeaways • Match the tool to the type of data that you are looking for

• Take the time to understand what you are trading, your outlook, your

timeframe, and the timeframe of your trade…before you enter into it

• Tools can help you find opportunities and analyze those opportunities

• Have an exit strategy! Both profit and loss targets