Okay, time for brass tacks. How do I find new trades?
Straight to the point! My type of question. Searching for new trades can be as thrilling as hunting for treasure at a 75% off sale at your favorite high-end store. Long-term bull markets can and do lead to low volatility, which means you need the most thorough tools to find trades. This is when I pull up my thinkorswim® Scan tab. Scanning for stocks is not a new idea, but thinkorswim lets you add all the complexity you want as well as a state-of-the-art alerting system.
Let’s start with the “trade what you know” aspect of the answer. First you need to look at the companies you know best by creating a watchlist of those symbols. Let’s call it NicoleKnowsBest. Now pop over to the Scan tab and bring up the Option Hacker (Figure 1). The first selection at the top of this page lets you choose which set of symbols you would like to scan. Choose your watchlist, in this case NicoleKnowsBest, and start to build your criteria. I like to look at things like days to expiration, percent out-of-the-money, open interest, and even mark percent of the underlying. Once your criteria are all set, press Scan and boom! You see possible options trades for the companies you know.
To find new products, you need to have stable rules and a well-defined strategy. The Scan tab excels here, too. To try it out, go back to the thinkorswim Scan tab and choose the Stock Hacker (Figure 2). You’ll see the filter types we offer and can have them all intertwined with each other. For example, you can add stocks that are within 0.5% of their 52-week high (study filter), have a last price of at least $20 (stock filter), and have a free cash flow per share growth year over year of at least 2% (fundamentals filter). Hit Scan and there you have some new products to check out.
Now let’s get artsy, and I mean state-of-the-art artsy. At the top right of the scan results you’ll see a menu icon. Click on this and choose “Alert when scan results change.” This feature will send you an alert (e-mail, text, push notification, etc.) whenever a symbol is added or removed from this scan. Yes, whenever, and that means day or night, rain or shine. The alerts are saved server side and tied to your thinkorswim account so you don’t have to have the platform open to receive them.
So, to answer your question, use the tools thinkorswim offers to find trades and customize them to your needs.