What are some of the ways that I can keep an eye on what the “big fish” are trading?
One of my favorite questions! Our mission is to level the playing field between what’s available to the professionals and you, the individual investor. Wall Street is like an elitist, members-only club filled with people who are in the know. But guess what? They’re not sharing their insights outside of the shiny polished brass doors of the club. So while I can’t tell you what they’re saying, I can try to show you what they’re trading.
Keeping it simple, markets are driven by supply and demand, which means they go higher when there are more buyers than sellers and vice versa. The majority of the volume is driven by institutional players so it behooves you to follow large trades so you can track capital flow as it enters and exits the stocks that you care about.
When an institutional level investor places a large trade, it demonstrates that the pros have conviction. It doesn’t mean the stock is going up or down for sure, but having a tool to look at recent large trades can help me build more conviction as well. Here are a couple of tools in thinkorswim® that help monitor block trades:
Trade Flash. This tool provides real-time, intraday commentary from a network of over 500 professional traders. Throughout the day, it’s populated with market-related observations that call your attention to underlying equities that are in play. Recently, we added an execution scanner which displays unusual trades in the market. The notion of “unusual” can take many forms so it’s much more than just trade size—such as different combinations of price, volume, volatility, and liquidity to uncover opportunities worthy of a second glance. For a Trade Flash step-by-step, see "Gear Head," left, page 12.
Option Time and Sales. I’m amazed at how few brokers have integrated this “must have” capability which offers the ability to see the price of every options execution, and where the market was at that time. I often use this in concert with Trade Flash. As soon as I see an unusual trade in Trade Flash, I’ll jump over to Option Time and Sales to see other executions around the same time.
What’s the latest in thinkorswim Mobile?
We spent a lot of time thinking about how mobile and desktop function together as ecosystem as opposed to being two completely separate platforms. Even when I’m at my desk sitting on conference calls, I always have my iPad and iPhone right next to me. So why can’t these screens all work together to immerse the trader even more deeply into the markets? Now, they can.
thinkorswim Mobile now uses the same “chain” icons on your thinkorswim iOS mobile apps that thinkorswim desktop uses to link various capabilities together. By tapping any of the symbols in your mobile watchlist, you can populate charts on the desktop, and vice versa. Also, saved orders now coexist in both mobile and desktop. This is just the beginning. You can anticipate much more symbiotic development between desktop and mobile in the months to come.