# Strategy Setup ## Getting Started The automation platform can be found under the "Trade" dropdown on Option Omega. You can choose: * Live — to view the current activity of the platform * Strategies — to view and manage your strategy library * Reporting — to generate and view information about the automations

## Strategy Creation The process of automation begins with creating a strategy. There are two choices: creating a strategy from scratch or creating a strategy from a backtest. ## Creating a Strategy from scratch If you wish to create a strategy from scratch, simply click "+ New Strategy" in the Trade/Strategies page.

## Creating a Strategy from a backtest

If you wish to create a strategy from a backtest, simply click "Create Automated Strategy" from a backtest.

The first option when a new strategy is created is to select if that strategy is active or not. An active strategy will be managed by the automation platform. An inactive strategy will not.

After the strategy is named, you can select which brokerage account you want the strategy to be automated in. Like a backtest on the platform, you can chose to apply an existing tag or add a new tag to the strategy. ## Funds & Allocations

In the automation platform, you must chose one of three allocation types: percentage, fixed value, and fixed quantity. Note, the calculations in the automation platform are the same architecture as the backtester. I.E they are based on Reg-T and not Portfolio (or other) types of margin accounts. Percentage will use the % of the specified account. The calculation is based on account NLV, but the user will also have brokerage BP requirements.

Fixed value will use a Max Allocation for the trade. This will cap the value of the entire trade regardless of the contract quantity.

Fixed Quantity will cap the number of contracts to the specified amount in the "Max Contacts Per Trade" field. Note, both the automation platform and brokers have allocation checks. These must pass before a strategy is traded. If a check fails from the OO platform, the user will receive an "Insufficient buying power to open trade" message. If a check fails from the broker, the log will show a message to that effect from the broker. ## Strike Conflict The user has multiple choices for strike conflict resolution. If any strikes are conflicted, the default behavior is to skip the trade. However, the user can also select "Move Conflicted Strikes", which is detailed in the in-app tooltip. This selection will allow the software to attempt to move any conflicted strikes to the next nearest strike using the leg selection criteria: fixed price, offset, deltas, etc. For parent/child legs if a parent conflicts, any children will automatically move with it. if a child conflicts, the parent will only be moved if the exact offset (green padlock) is toggled on

## Entry Execution

The entry price of the trade that the automation platform will submit as a limit order is determined by the NBBO at the opening of the trade. The entry execution field allows you to configure the speed and price adjustment. For example, you can set a trade to adjust .10 every 10 seconds. *Note, the interval and max attempts fields must be less than 55 seconds when multiplied together.* *Additional note: there is a functionality for configuring the entry time in entry execution,*[ *which is detailed here*](https://docs.optionomega.com/automation-beta-resources/entry-time-configuration)*.* ## Exit Execution

The exit price of the trade that the automation platform will submit as a limit order is determined by the NBBO at the opening of the trade. The exit execution field allows you to configure the speed and price adjustment. For example, you can set a trade to adjust .10 every 10 seconds. Additionally, you have the option to switch to a market order after a certain number of attempts (see [Switch to Market Order](#switch-to-market-order)). *Note: The interval and max attempts fields must be less than 55 seconds when multiplied together.* In the event a trade does not exit (while using a platform-managed exit or stop), at the top of each (i.e. the next) minute, the platform will reset the order price to the current mid price and re-attempt the fill progression sequence. ## Switch to Market Order When enabled, the platform will automatically convert the limit order to a market order after a specified number of exit attempts. Unlike a limit order, a market order carries no price level - it will fill at whatever price the market is currently offering, which may be significantly different from the last mid price. Support for market orders on exit varies by broker: * **Tradier** and **ToS/Schwab** APIs support market closing orders for both individual options and spreads / multi-leg strategies. * **tastytrade's** API supports market closing orders for individual options (including single option leg groups) but does not currently support market orders for spreads or multi-leg strategies. For tastytrade accounts, this option will have no effect on spreads or other multi-legged positions - the platform will continue adjusting the limit order price until filled, or the position is reset at the top of the next minute. Consider adjusting your exit progression accordingly if a timely exit is required. It is recommended to use this feature with caution, as market orders on options can result in unfavorable fills, particularly for spreads with wider bid/ask spreads or lower liquidity. ## Ignore Bidless Longs

Selecting "Ignore Bidless Longs" will allow the platform to bypass closing the bidless longs on exit execution. *Note: This option is applicable only for spread-type trades. If you turn it on for a single-leg trade, the platform WILL NOT ignore the bidless long and will attempt to exit the trade.* ## Avoid Wide Bid-Ask Spreads

**Avoid Wide Bid-Ask Spreads** attempts to avoid momentary illiquidity by delaying trade execution of any platform managed exit, whether it's a stop loss, profit target, or early exit (note that this setting does not apply to trade entry or broker resting orders). The bid-ask spread is calculated at each trade interval (1 minute, or 1-second if using [intra-minute stop losses](/automation/profit-target-and-stop-loss-order-types.md#intra-minute-stops)), and the trade's exit is only executed if the bid-ask spread falls below the defined Max Bid-Ask Spread Width. #### Max Bid-Ask Spread Width The Bid-Ask spread is calculated for the *entire trade* (as defined by your exit and/or leg groups) using either a Percentage or Fixed Amount: * A **Percentage** based Bid-Ask spread is calculated by the Ask minus the Bid, divided by the Mid price, and then converted to a percentage. For example, a Bid of $1.00 and Ask of $1.50 has a Mid of $1.25. Spread Width (%) = (1.50–1.00)/1.25 = 0.4 = 40%. * A **Fixed Amount** Bid-Ask spread would be calculated by simply taking the Ask minus the Bid. In the example above, this would be a Spread Width = 1.50–1.0 = 0.5. In the examples above, a Max percentage width of 35% or fixed amount of $0.45 would result in an exceeded Max Width. The spread width will be re-evaluated each trade interval (1-minute or 1-second if using [intra-minute stop losses](/automation/profit-target-and-stop-loss-order-types.md#intra-minute-stops)) and the exit will only be triggered once the spread width no longer exceeds the defined maximum. {% hint style="info" %} **Backtesting** also includes a filter to Ignore Wide Bid-Ask Spreads. The calculation in Backtesting differs slightly, using a 100% width on individual legs. See: [Backtesting Setup - Ignore Wide Bid-Ask Spreads](/backtesting/backtest-setup.md#ignore-wide-bid-ask-spread). {% endhint %} #### Max Attempts If you specify the number of **Max Attempts**, the platform will revert back to the standard exit progression after the specified number of attempts, serving as a fallback to exit the trade even if spread widths do not narrow below the max. {% hint style="danger" %} Delaying exit to wait for a narrower spread can result in taking a larger loss, especially in fast-moving markets. If **Max Attempts** is left blank, the platform will continue avoiding trade exit as long as the spread width exceeds the maximum and positions may even be held into expiration. {% endhint %} ## Execution Override

Execution override allows you set a custom exit if you have an exit condition that you want to treat differently from the standard exit execution. ## Starting Offset

Users can specify a "starting offset" as both entry and exit execution parameters; this value can be positive or negative, and will instruct the automation platform to start the order fill sequence above/below the current mid price by the value specified. Note— this adjustment is an absolute value, not a directional offset. The platform will not adjust to credit / debit - it simply adds the offset to the current mid price at entry. **Entry execution examples:** * If you are selling a $3.00 credit spread (STO), a $0.10 offset will result in a $3.10 initial (relaxed) entry, whereas a $-0.10 offset will result in a $2.90 (aggressive) entry. * Conversely, if you are buying a $3.00 debit spread (BTO), a $0.10 offset will result in a $3.10 initial (aggressive) entry, whereas a $-0.10 offset will result in a $2.90 (relaxed) entry. **Exit execution examples:** * If you are exiting with a $3.00 credit spread (STC / closing a DC), a $0.10 offset will result in a $3.10 initial (relaxed) exit, whereas a $-0.10 offset will result in a $2.90 (aggressive) exit. * If you are exiting with a $3.00 debit spread (BTC / closing an IC), a $0.10 offset will result in a $3.10 initial (aggressive) exit, whereas a $-0.10 offset will result in a $2.90 (relaxed) exit. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.optionomega.com/automation/strategy-setup.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.