Most people are too lazy. Help About Wikipedia Community portal Recent changes Contact page. This tool has so many useful features that I think so far it's the PERFECT trading Platform. As always, you should only invest money in stock options if you can truly afford to lose it. IG IG Trxding IG Markets Group.

I would like to share with you a strategy I used today to take advantage of the extremely high option prices which exist for the option series that expires on October 21, four days after the announcement. One of my favorite option strategies is to buy one or more calendar spreads on a company that will be announcing earnings in a few weeks. The option series which expires directly after the announcement experiences an elevated Implied Volatility IV relative to thinkoswim the other option series.

A high IV means that those options are relatively expensive compared to all the other options that are trading on that stock. IV for the post-announcement series soars because of the well-known tendency for stock prices to fluctuate far more than usual once the announcement is made. While there is some historical evidence that the stock usually moves in the opposite direction that it did in the week or two leading up to the announcement, it is not compelling enough to always bet that way.

For that reason, I like to buy calendar spreads at a strike slightly above the current price of the stock in hopes that the stock will move toward that strike as we wait for the announcement day. Apple iphone 5s price verizon, calendar spreads make the greatest gain when the stock is exactly at the strike thinkorswim options trading authority on the day when the short side of the spread expires.

If I were to sell one of these weeklies on 6 occasions, I would get my entire investment back and still have 19 more opportunities to sell a weekly call. Another way of moving forward would to sell new calls with a month of remaining life when the 21Oct16 calls expire. It would take three such sales to get all of my initial investment back, and I would have three more opportunities to sell a one-month call with all the proceeds being pure profit.

In any event, over the six-months that I might own the 21Apr17 calls, I will have many chances to sell new thinkorswim options trading authority and hopefully collect much more time premium than I initially shelled out for the calendar spread. There may be times when I have to authodity back expiring calls because they are in the money, but I should be able to sell further-out short-term calls at the same strike for a nice credit and whittle down my initial investment.

I also made this trade today: Buy To Open 1 IBM 21Apr17 call IBMC If IV for the 21Oct16 series does escalate from its present 25 as it shouldI might be able to sell calls with a week of remaining life for a higher price than is available right now. I will tell you exactly how I used this strategy a week ago when SPY paid its quarterly dividend. Four times a year, SPY pays a dividend to owners of record on the third Friday of March, June, September, and December.

Each of these events presents a unique thinkorswm to make some money by buying calendar spreads using puts to take advantage of the huge time premium aithority the puts in the days leading up to the dividend day. Since the stock goes down by the amount of the dividend on the ex-dividend day, the option optioons prices the amount of the dividend into the option prices. Note that the close-to-the-money options at the The slightly out-of-the-money put options are trading for nearly double the prices for those same distance-out calls.

The market has priced in the fact that the stock will fall by the amount of the dividend on the ex-dividend day. In this case, that day is Friday. On Wednesday and Thursday, Aithority decided to sell some of those puts that had such large premiums in them to see if there might be some opportunity thinkorswim options trading authority. Obviously, I sold the 16Sep16 puts in each calendar spread. Note: On August 30th, the CBOE offered a new series of SPY options that expire on Wednesday rather than Friday.

The obvious reason for this offering involves the dividend situation. Investors who write calls against their SPY stock are in a real bind when they sell calls that expire on an ex-dividend Friday. First, there is very little time premium in those calls. Second, there is a serious risk that the call will be exercised by the holder to take the stock and capture the dividend. If the owner of SPY sold the series that expired on Wednesday rather than Friday, the potential problem would be avoided.

I sold every spread for more money that it cost including commissions. I collected mine in just two days. Trading SPY options is particularly easy because of the extreme liquidity of those options. In most cases, I was able to get an execution at the mid-point price of the calendar spread bid-ask range. Tags: Auto-TradeCalendar SpreadsCallsdividendEarnings Option StrategyETFEx-DividendMonthly OptionsPortfolioProfitprofitsPutsRiskSPYStocks vs.

We will check out the feasibility of buying spreads at thinkorsim strike prices in an effort to reduce risk. Here is what the risk profile graph looks like for the three spreads: Note that the break-even range is trqding exactly the same with the three spreads. Presumably, you are trading calendars on a stock you believe is headed higher. You might thinkorswin to buy an at-the-money calendar and a second one at a higher strike.

If you are bullish on the stock, this seems to be a better way to go. The best thing about this choice of two spreads is that the maximum gain can be achieved across a 5-point range rather than being available at only one precise price point. Another strategy might be to buy the calendar spread, and then wait to see which way the stock moves, and then buy another calendar in that direction. The big risk with this strategy is that the stock might whipsaw. As usual, there are no easy ways to make sure gains in this world.

The best bet seems to be to take a position that the stock is headed ahthority one particular direction usually up unless you are trading on some ETP that is destined to go down, like VXXand combine an at-the-money spread with one at a higher strike price. Most months you should be making a significant gain if your stock behaves as you expect, and that gain can materialize over a nice range of possible prices.

It is called a calendar spread. It is also known as a time spread or a horizontal spread. On a specific date on the calendar, you discover whether you made or lost money since you first bought the calendar spread. In the next few blogs, I autthority discuss all sorts oltions variations and permutations you can make with calendar spreads, but today, we will focus on a bare bones explanation of the basic spread investment.

All About, or at Least an Introduction to Calendar Spreads A calendar spread consists of the simultaneous purchase of thinkorswim options trading authority option either a put or a call and the sale of another option either a put or callwith both the purchase and the sale at the same strike price, and the life span of the option you bought is greater than the option you sold.

You can trade either puts or calls in this kind of spread, but not both in the same spread. Some things that we all know about options: 1 they all have a limited life span, and 2 if the underlying stock does not change in price, all options fall in value every day. This is called decay. In option parlance, it is called theta. Theta is the amount that the option will decay in value in uathority single day if the underlying stock remains flat.

The basic appeal of a calendar spread is that the decay or theta of the option that has been sold is greater than the decay or theta of the stock that was bought. Every day that the stock remains flat, the value of authrity spread should become slightly greater. For this reason, most buyers of calendar spreads are hoping that the stock does not move in either direction zuthority much but we will see that is not always the case with all calendar spreads.

The all-important date of this spread is September 23, That is the day on which the short options the ones you sold will expire. One good thing about calendar spreads is that the value of the options you bought will always be greater than the ones you sold, so you can never lose the entire amount of money you invested when you bought the spread. Even worse, in most cases, you would lose the entire investment if the stock stays flat rather than moving in the direction you were hoping.

There is a range of possible prices where your spread thinkorswim options trading authority be profitable, and if you enter your proposed spread in a software program like the free Analyze Tab at thinkorswimyou can tell in advance what the break-even range will be for your investment. There are ways that you can expand the break-even range so that a greater stock price fluctuation could be tolerated, and that will be the subject of our next blog.

Tags: Auto-TradeBearish Options StrategiesBullish Options strategiesCalendar SpreadsCallsdiagonal spreadsETFimplied volatilityLEAPSMonthly OptionsNKEPortfolioProfitPutsRiskStocks vs. The Difference Between Buying Stock and Trading Options If the truth be known, investing in stocks is pretty much like playing checkers. Any year-old can do it. If you can read, you thinkorswim options trading authority buy stock. Most people reject that idea, of course.

Like the residents of Lake Wobegone, stock buyers believe that they are all above average — they can reliably pick the right ones just about every time. Buying and selling options thinkorswim options trading authority more like playing chess. It thinkorswim options trading authority be and is, for anyone who is serious about it a life-time learning experience. People with little understanding or experience buy stocks every day, and most of their transactions involve buying from professionals with far more resources and brains.

Those smart guys with all the resources are the ones who are selling the stock while you are buying it at that price. Option investing takes study and understanding and discipline that the purchase of stock does not require. Every investor must decide for himself or herself if they are willing to make the time and study commitment necessary to be successful at option trading.

Most people are too lazy. It is a whole lot easier to play a decent game of checkers than it is to play a decent game of chess. But for some of us, options investing is a whole lot more challenging, and ultimately more rewarding. We have two of these portfolios, and they are set up each January. So far inwhile the market SPY has gained 4. We could close either portfolio right now and take those gains off the table after paying a small commission on one or two spreads.

If you buy stock rather than trading options, you will probably never see gains like this, even if you are lucky enough wuthority pick one of the best stocks in the entire market. This weekend, I recommended another similar spread trade that we are setting up in a new portfolio so we can watch it evolve over time. Like the above two portfolios, it cannot be Auto-Traded but is easy to set up yourself you can call it in to your broker if you are not familiar with placing option spread trades.

This spread will expire on January 20,about six months from now. The long-term price action of this equity can be measured, however, and it showed that if this spread had been placed every month for the last 50 months, the spread would have made a profit 44 times and it would have lost money 6 times. If you come on board, you can see the full report where I show the profit from this trade for each of the last tfading months and the exact spread that should be placed. I bought more of the exact same spread in my personal account today at the same price I indicated it could be bought in the last Saturday Report.

Tags: Auto-TradeCalendar SpreadsCallsCredit Spreadsdiagonal spreadsETPLEAPSMonthly OptionsPortfolioProfitprofitsPutsRiskStocks vs. We like to think of it as shorter than a marathon but longer than a sprint. Most people who trade options seem to prefer sprints, i. The basic underlying idea of our 10K Strategy is to do the opposite of what most options traders do. Instead of buying short-term calls in hopes of a quick windfall gain, we primarily sell those calls to option speculators.

We like to think that we are sort of in the business of selling lottery tickets. We buy thin,orswim options to use as collateral for selling short-term options. All options go down in value every day that the underlying stock remains unchanged. This daily decay in value is called theta in options parlance. Theta for short-term options is much greater than theta for longer-term options at the same strike aauthority, and this difference in decay rates is what makes our strategy a successful one most of the time.

Other portfolios are based on Exchange Traded Products ETPs. We also have a portfolio based on options of USO where we are betting that the long term price of oil will be higher than it is today. The prospects look excellent for it to double before its first optionz has been completed. The record: In a world of record low interest rates and anemic investment returns for most equities even hedge funds lost money inthese results offer a strong vindication of the 10K Strategy.

Admittedly, NKE has tumbled steadily over the past 8 months and much of the gains have been eroded away, but a basic assumption of the strategy is that you select underlying stocks which you think will remain flat or rise over time. So far, we have been fortunate enough to pick winners. If you are lucky enough to pick a winner, you would have an excellent chance to make many times as much as you would make just buying the hhinkorswim.

As with all investments, you should only use money that you can truly afford to lose. Options are leveraged investments, and unless you totally understand the risks, you can easily and quickly lose more money than you could with the equivalent investment in the purchase of stock. I think it is worth a little work to educate yourself about the risks and potential rewards of thinkorswjm options. Tags: Auto-TradeCalendar SpreadsCallsCOSTCredit Spreadsdiagonal spreadsETFFBimplied volatilityJNJMonthly OptionsNKEPortfolioProfitPutsRiskStocks vs.

Option players could celebrate, however. Thinkorswim options trading authority have a lot of happy subscribers who follow this portfolio either on their own or through the Auto-Trade service at thinkorswim. That is the story I would like to share with you today. Update on Facebook Earnings Announcement Play On May 11,I told you about two trades I was making in my personal account.

You can see the entire blog which explains my thinking on our blog page. Here they are: Buy To Open 2 FB 16Sep16 calls Traading I sold this series because it would expire just after the July 27 earnings announcement. My option trading made 17 times more money than the stock buyers would have made. Tags: Auto-TradeCalendar SpreadsCallsCredit Spreadsdiagonal spreadsEarnings AnnouncementEarnings Option StrategyEarnings PlayFacebookFB thinkorswim options trading authority, implied volatilityMonthly OptionsPortfolioProfitPutsRiskThinkorswim options trading authority vs.

There were some good learning experiences concerning how to trade out of calendar spreads once the announcement has authoroty made. You need to tread water until the short options you sold expire and you can close out the spreads, and that can present some challenges. How to Trade Out of an Earnings-Related Options Play According to Openfolioa site where about 70, users share information on their aurhority, three out of four investors lost money in June, with optiona average return of Our only losing tradiny was a special bet that the short-term price of oil would fall.

One of our portfolios trades options on Nike NKE which announced earnings after auyhority close last Tuesday, June We had spreads in place similar to those that I told you about last week and several others as well. Sell to Open 1 NKE 1Jul16 I was disappointed to have to pay so much more, but I still believed it was a pretty good bet. When you buy calendar spreads, you select strike prices where you hope the stock will end up when the short options expire, as the at-the-money strike spread will thinkorswim options trading authority the most profitable.

Buying spreads at several strikes gives you more places where you can end up being happy, but your maximum gain is reduced a bit when you buy the increased protection that owning several strikes provides. After I made the above trades on Monday, I suffered my second disappointment. If I had anticipated this better, I would not have bought the spreads at the 50 strike.

As we have often seen, this initial move was quickly reversed. I was in a bad position, however, because most of my spreads were at strike prices which were below the stock price. In option terms, my positions were negative net delta — this means that if the stock went authroity another dollar, I would lose money. I aggressively changed to a neutral net delta condition by closing out the lowest-strike put calendars at the 50 strike and changing some Then I encountered my third disappointment.

I had expected implied volatility IV of the long 29Jul16 series to be 27 after the announcement based on recent history, but it ended up being 24 which dampened my expected results. That meant the option prices would not be as high as I expected when I went to sell them. It was a lot of work but surely worth the effort. What could be taken away from this play was; 1 that the stock often rises in the last day before the announcement probably legging into the calendars would have been more profitable, but more risky2 the initial move after the announcement is usually reversed, and 3 it is important to make adjustments to create a neutral net delta condition for all your spreads until the short options expire.

We are celebrating this event by offering you our lowest subscription price ever. If you ever wanted to learn all about the wonderful world of options and my favorite options strategy, now is the time to act. As our birthday present to you, we are offering the lowest subscription price than we have ever offered — our full package, including all the authortiy reports, my White Paperwhich explains my favorite option strategies in detail, and shows you exactly how to carry them out on your own, a day options tutorial program which will give you a solid background on option trading, and two months of our weekly newsletter full of tradable option ideas.

The premium service offers you real-time trade alerts so you can follow along with our trades if you wish, or participate in Auto-Trade at thinkorswim. This is a time-limited offer. You must order by Wednesday, June 15, This is the perfect time to our 15 th birthday with us, and give yourself and your family the perfect birthday gift that is designed to deliver higher financial returns for the rest of your investing life.

It may take you a little homework on your part, but I am sure you will end up thinking it was well worth the investment. It could be the best investment decision you ever make. Today I would also like to share with you a small bet I made today on Nike. But the opgions news today is our 15th birthday celebration offer. This is the perfect time to our 15th birthday with us, and give yourself and your family the perfect birthday gift that is designed to deliver higher financial returns for the rest of your investing life.

The price of Nike NKE was beaten down last week, apparently on the news that one of their largest retailers, Sports Authority, had declared bankruptcy and was conducting a going-out-of-business sale. I believe that trxding news has unfairly impacted the price of Thinkorswim options trading authority. After all, people will continue to buy NKE shoes. NKE has been doing very well lately. In that month, there was a 2-for-1 stock split, and this often results in a lower stock price over thinkoswim subsequent few months apparently, a fair number of people sell off half their stock so they retain the same number of shares they had before the split, thinkorswim options trading authority most or all of their original investment back tjinkorswim their authoritu.

The same thing happened to Google when it split its stock a few years ago thinkorswim options trading authority it was lower at the end of the year than it was at the beginning, the only time in its first 9 years of existence that that happened. This is also the maximum loss you could possibly incur. Not only is the gain greater, but you have an extra quarter including the Christmas selling season to watch NKE grow or at least not fall.

I consider this to be a conservative investment because I believe NKE has had its price unfairly pushed lower because of the Sports Authority bankruptcy and is selling near the low for the year in spite of exceeding earnings estimates every quarter for the last year. As always, you should only invest money in stock options if you can truly afford to lose it.

Tags: CallsCredit Spreadsimplied volatilityLEAPS tradingg, Monthly OptionsNKE thinkorswim options trading authority, ProfitprofitsThinkorswim options trading authorityRiskSports AuthorityStocks vs. Allen believes that the 10K Strategy is less risky than owning stocks or mutual funds, and why optuons is especially appropriate for your IRA. I have been trading the equity markets with many different strategies for over 40 years. Terry Allen's strategies have been the most consistent money makers for me.

Tip 1 - All About Stock Thlnkorswim. Tip 2 - Check Out Auto-Trade. Tip 3 - Never Buy A Mutual Fund. Tip 4 - All About Contango. Tip 5 — Shoot for the Stars Strategy. Tip 6 - The 10K Strategy. Tip 7 - Trading ETF Options. Tip 8 - Other Stock Option Resources. Disadvantages of Option Trading. Sign Up for Our Free Newsletter. Follow Terry's Tips on Twitter.

Like Terry's Tips on Facebook. Watch Terry's Tips on YouTube. Friday, September 30th, IBM announces earnings on October 17, less than three weeks from now. In the week leading up to the announcement, IV for the post-announcement series almost always soars, and the stock often moves higher as well, pushed higher by investors who are expecting good news to be forthcoming. Buy To Open 1 IBM 21Apr17 call IBMC I also made this trade today:.

This is the same calendar spread as the first one, but the sell side is the 14Oct16 series which expires a week before the announcement date week. Calendar Spreads Tweak 4. Wednesday, September 21st, Today I would like to discuss how you can use calendar spreads for a short-term strategy based around the date when a stock auhority ex-dividend. Facebook Bid Ask Puts Calls Sept Calendar Spreads Tweak 1. Thursday, September 1st, This week we will continue our thinkorswim options trading authority of a popular option spread — optiins calendar spread which is also called a tradlng spread or horizontal spread.

Face book Risk Profile May All About, ahthority at Least an Introduction to Calendar Spreads. Thursday, August 25th, This week I would like start an ongoing discussion about one of my favorite option plays. A calendar spread consists of the simultaneous purchase of one option either a put or a call and the sale of another option either a put or callwith both the purchase and the sale at the same strike price, and the life span of the option you bought is greater than the option you sold.

Buy to Open 5 NKE 20Jan17 60 calls NKEC The options that are being bought will expire on January 21, about 5 months from now and the options being sold will expire on September 23,one month from now. Here is opfions risk profile graph which shows the loss or gain on the original spread at various prices where the stock might be trading on September 23rd:. The Difference Between Buying Stock and Trading Options.

Monday, August 15th, This week I would like discuss a little about the differences between buying stock and trading options. If the truth be known, investing in stocks is pretty much like playing checkers. Historical Performance of 10K Strategy Stock-Based Portfolios. Monday, August 8th, Enjoy the full report. Update on Facebook Earnings Announcement Play. Monday, August 1st, On May 11,I told you about two trades I was making in my personal account.

Buy To Open 2 FB 16Sep16 calls FBC How to Trade Out of an Earnings-Related Options Thinkorswim options trading authority. Thursday, July 7th, According to Openfolioa site where about 70, users share information on their investments, three out of four investors lost money in June, with an average return of Buy to Open 1 NKE 29Jul16 Buy to Open 1 NKE 29Jul16 55 call NKEC Lowest Subscription Price Ever Still Available.

Thursday, June 9th, Lowest Subscription Price Ever. Tuesday, June 7th, Vermont website design, atuhority design, and web hosting provided by Vermont Design Works.

Thinkorswim Options Trading Tutorial

Trade on the thinkorswim Platform. Open an Account and Get Up To $! has been visited by K+ users in the past month Rated #1 · Trading Software · Best In Class · No Platform Fees. Is thinkorswim, Division of TD Ameritrade, Inc. the right broker for you? Read our expert review to get the facts, the best bonuses and sign up today!. Thinkorswim - posted in Think or the Financial Industry Regulatory Authority The risks involved in trading binary options are high and may not be suitable for.