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GPS for Markets: Introducing Trade Finder

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August 31, 2015

Arithmophobia is the fear of numbers or math. And sophophobia is the fear of learning anything new. For many, options trading can seem daunting and it’s best left to math majors. But she who holds a BA in English Lit is here to tell you that options trading is not just for those mathletes. Today at TD Ameritrade, two out of every five trades are derivatives trades. Retail investors’ adoption of options is one of the strongest secular trends in our industry. In fact, each year over 70,000 retail investors place their first options trade at TD Ameritrade. 

One of the biggest myths associated with options trading is the often-cited notion that “no one makes money trading options.” But most traders credit their friends for encouraging them to learn options trading. And, if you’ve got the right kind of friends, those friends have your best interest at heart—as we all know, nothing is closer to a trader’s heart than making money. (Ok, I kid, but it’s close.)

I first turned to options trading in 2000 following a major loss trading equities. With options, I learned that I could put less capital at risk while still chasing the returns I was looking for. When I started trading options, all I had to lean on was an option chain. (Don’t let the Botox fool you. I’m ancient.) But as times have changed, so have our tools. For the better part of the past year, my team has worked tirelessly to conceive and build something that will help fuel the next generation of options traders. Today, we are proud to unveil Trade Finder.  

Trade Finder is to options trading what GPS is to a road trip. It’s a great tool to help you navigate a way to get from Point A to Point B. To get started, all you need to have is an opinion about an equity, optionable index, or optionable ETF. That opinion should be based on where you think it’s headed and when you think it will get there. In addition, the tool allows you to pinpoint the probability of success that you are looking for. Obviously, the higher the likelihood of a successful trade, the lower the potential return on the trade. Trade Finder also helps you with position sizing. As a general rule, most good traders only try to allocate a set percentage of their portfolio to any given trade. Trade Finder allows you to select that percentage (I usually go with around 1% to 2% for my trades, but every trader needs to make this a personal decision) and displays all the trades that match your criteria.

Trade Finder will take your opinions about the trade and return all of the relevant strategies ranked in order of probability of success. In addition, if you don’t understand a particular strategy, Trade Finder even has descriptions of the trade to help you to understand what it’s seeking to accomplish and the potential risk/reward. More of a visual learner? You can have the description read out loud to you, so you can focus on the interactive profit/loss graph as it demonstrates each concept visually. 

See it in action

Trade Finder seamlessly navigates you from idea to execution. Check out this video that brings the features of Trade Finder to life:

As you can see, we’re really excited about the launch of Trade Finder. We wanted something educational that takes you through what you need to know, step-by-step, with easy-to-understand explanations of trade examples. Aside from functionality, we felt it was also important to bring you a tool that was clean, simple, easy-to-use, but that was also visually stunning. (Let’s face it ... many of us look at our trading platform more than we look at our spouses.)

We hope you enjoy it and that you leverage Trade Finder to expand the arsenal of tactics you can utilize in your quest to outperform the markets. So jump in and check it out.

Options. Simplified.

Trade Architect can help you stay connected with the market. Now featuring the Trade Finder tool, Trade Architect can also help simplify the process of making option trades.