P&L Action: Exit When Underlying Price Moves

Updated: September 20, 20252 min read

The Exit When Underlying Price Moves function is a P&L Action in the Trade Template. It allows you to automatically close a trade when the underlying price reaches a defined level relative to a selected Leg. This enables you to set up dynamic exit scenarios that are directly tied to the strikes of your position.

1. Basic Principle

This setting checks whether the underlying price crosses above or below a specific threshold. As soon as this happens, the entire trade is closed with a Market Order.

Two options are available:

Exit when underlying price is below leg: Lower side
Exit when underlying price is above leg: Upper side

At least one of the two conditions must be configured. You can also set both (upper and lower side).

2. Leg Selection

For each side (below / above), you must select a Leg from the current Trade Template.
The selection is dynamic and any Leg defined in the template can be used. This allows you to flexibly tie the exit to different Legs of your strategy, for example to the Short Put in a Credit Spread.

The Leg designation is derived from the individual Leg configurations and consists of:

3. Offset Settings

In addition to the selected Leg, you can define an offset to shift the exit trigger up or down depending on the Strike of the respective contract.

Specified in Percent: The exit is triggered when the underlying price falls below (for negative values) or rises above (for positive values) the strike of the selected Leg by the specified percentage.
Specified in Points: The exit is triggered when the underlying price falls below (for negative values) or rises above (for positive values) the strike of the selected Leg by the specified number of points.

4. Order Execution

The closing conditions resulting from the configurations are submitted immediately after the trade is opened and then exist in TWS as Conditional Orders.

5. Practical Examples

Example 1: Short Put Exit when strike tested

A Short Put is at Strike 6500. The condition Exit when underlying price is below leg is selected with an offset of 0 points. As soon as the SPX falls below 6500, the entire trade is automatically closed.

Example 2: Iron Condor with buffer

In an Iron Condor, the Short Call at Strike 6600 is to be monitored. The condition Exit when underlying price is above leg is set with an offset of +5 points. The exit is triggered when the SPX rises to 6605. That is, already 5 points ITM.

6. Usage Notes

The exit via underlying price can run in parallel with a Stop Loss for individual Legs.
At the group and Combo level, due to order management, only the exit via underlying price or via Stop Loss can be active. Both in parallel is not possible here.
You can combine the underlying price movement with other P&L Actions (such as Profit Target or Early Exit).