> For the complete documentation index, see [llms.txt](https://docs.optionomega.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.optionomega.com/automation/strategy-setup.md). # Strategy Setup ## Getting Started The automation platform can be found under the **Trade** dropdown in 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 automation process begins with creating a strategy. There are two choices: create a strategy from scratch or create one from a backtest. ## Creating a Strategy from scratch If you want to create a strategy from scratch, click **+ New Strategy** on the **Trade → Strategies** page.

## Creating a Strategy from a backtest

If you want to create a strategy from a backtest, click **Create Automated Strategy** from a backtest.

The first option when a new strategy is created is whether the strategy is active. An active strategy will be managed by the automation platform. An inactive strategy will not.

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

In the automation platform, you must choose one of three allocation types: percentage, fixed value, or fixed quantity. Note: The calculations in the automation platform use the same architecture as the backtester. They are based on Reg-T, not portfolio margin or other margin account types. Percentage uses a percentage of the specified account. The calculation is based on account NLV, but the user must also meet brokerage buying power 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 caps the number of contracts at the specified amount in the **Max Contracts 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 in the OO platform, the user will receive an **Insufficient buying power to open trade** message. If a check fails at the broker, the log will show a broker-generated message. ## 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 allows the software to attempt to move any conflicted strikes to the next nearest strike using the leg selection criteria, such as fixed price, offset, or delta. For parent and child legs, if a parent conflicts, any children automatically move with it. If a child conflicts, the parent only moves if **Exact Offset** is enabled with the green padlock.

## Entry Execution

The entry price that the automation platform submits as a limit order is determined by the NBBO at trade entry. The **Entry Execution** field lets you configure the speed and price adjustment. For example, you can set a trade to adjust by `0.10` every 10 seconds. *Note: The interval and max attempts fields must total less than 55 seconds when multiplied together.* *Additional note: Entry time can also be configured in Entry Execution, as detailed in* [*Entry Time Configuration*](/automation/entry-time-configuration.md)*.* ## Exit Execution

The exit price that the automation platform submits as a limit order is determined by the NBBO when the exit begins. The **Exit Execution** field lets you configure the speed and price adjustment. For example, you can set a trade to adjust by `0.10` every 10 seconds. You also 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.* If a trade does not exit while using a platform-managed exit or stop, the platform resets the order price to the current mid price at the top of the next minute and re-attempts the fill progression sequence. ## Switch to Market Order When enabled, the platform automatically converts the limit order to a market order after a specified number of exit attempts. Unlike a limit order, a market order has no price level. It will fill at the current market price, which may differ significantly 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 or 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 has no effect on spreads or other multi-leg positions. The platform will continue adjusting the limit order price until filled, or the position will reset at the top of the next minute. Consider adjusting your exit progression if a timely exit is required. Use this feature with caution. Market orders on options can result in unfavorable fills, especially for spreads with wider bid-ask spreads or lower liquidity. ## Ignore Bidless Longs

Selecting **Ignore Bidless Longs** allows the platform to bypass closing bidless long legs during 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 execution of any platform-managed exit, whether it’s a stop loss, profit target, or early exit. 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). The trade exits only 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 subtracting the Bid from the Ask, dividing by the Mid price, and converting the result to a percentage. For example, a Bid of `$1.00` and Ask of `$1.50` produce a Mid of `$1.25`. Spread Width (%) = `(1.50 - 1.00) / 1.25 = 0.4 = 40%`. * A **Fixed Amount** Bid-Ask spread is calculated by simply subtracting the Bid from the Ask. In the example above, Spread Width = `1.50 - 1.00 = 0.50`. In the examples above, a max percentage width of `35%` or a fixed amount of `$0.45` would exceed the max width. The spread width is 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). The exit triggers only 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 and uses a `100%` width on individual legs. See [Backtest Setup](/backtesting/backtest-setup.md#ignore-wide-bid-ask-spread). {% endhint %} #### Max Attempts If you specify **Max Attempts**, the platform reverts to the standard exit progression after that number of attempts. This acts as a fallback to exit the trade even if spread widths do not narrow below the maximum. {% hint style="danger" %} Delaying an exit to wait for a narrower spread can result in a larger loss, especially in fast-moving markets. If **Max Attempts** is left blank, the platform will continue avoiding the 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 to set a custom exit if you have an exit condition that should be handled differently from the standard exit execution. ## Starting Offset

Users can specify a **Starting Offset** for both entry and exit execution parameters. This value can be positive or negative and instructs the automation platform to start the order fill sequence above or below the current mid price by the amount specified. Note: This adjustment is an absolute value, not a directional offset. The platform does not adjust for credit or 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 This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## 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, and the optional `goal` query parameter: ``` GET https://docs.optionomega.com/automation/strategy-setup.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. 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.