Charts on an options trade

Why the candles are the underlying, what the strike and break-even lines are, and why the stop is typed as a premium.

Every chart the app draws for a trade — on Review, in the Journal, and in the quick trade preview — plots the underlying, because that is the instrument with a public price history. On an options trade that is not the thing you bought.

Your prices and the chart’s prices are different numbers

A trade’s entry, exit, stop loss and take profit are all premiums — what one contract cost. A $140 put on a stock trading at $131 might cost $6.10. Drawing $6.10 on a chart whose axis runs from $129 to $135 would put the line off the bottom of the screen, and any line that did land there would be measuring something else. So on an options trade those four lines are not drawn at all, and the numbers are stated in words instead: open the chart on a review card and the panel names the contract and gives you the entry and exit premium above the fields.

What the two lines on the chart are

  • Strike (solid) — the contract’s strike price. It is an underlying price, so it belongs on these candles: it is the level the option is measured against.
  • B/E (dashed) — the break-even underlying at expiry: strike plus the premium for a call, strike minus the premium for a put. Where the stock had to get to for the trade to come out level, ignoring time value.

A multi-leg structure has no single strike, so neither line is drawn. The chart is still useful context — it is what the underlying did while you held the position.

Setting a stop or target on an options trade

Type it. The Pick button on a review card — which sets a level by clicking the chart — is not offered on an options trade, because a click on those candles gives an underlying price and the field is stored as a premium. Recording $131 as the stop on a $6 contract would be a wrong number in a money field, and nothing downstream could tell. The entry and exit premiums shown just above the boxes are the scale to work from.

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Charts on an options trade — Ledger of Alpha Help