How Your Trading Platform Can Help with Math: Stats on Stats

thinkorswim platform’s ® Today’s Options Statistics divvies up the market by call and put volume, delta values, historical volatility, and more.

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https://tickertapecdn.tdameritrade.com/assets/images/pages/md/How Your Trading Platform Can Help with Math:
2 min read

Not all traders aced math. Some even had that recurring dream where they showed up for the test—with no pants on. The reality is traders need statistics. thinkorswim® tools have you covered.

An options trader and a statistician walk into a bar. They hit it off and together create tools that whittle down tricky math into a few clicks that can help traders understand a big options market. Thought I was telling a joke, did you? No joke. Just a happily ever after.

This marriage of minds created a thinkorswim platform tool called Today’s Options Statistics. It breaks down daily options volume into calls and puts. It then sorts by options sold at the bid or below, options bought at the ask or above, and options caught between the market. This allows you to quickly and easily view the entire spectrum of options on an underlying security.

Had enough yet? Good, because there’s more (I assume you answered no).

You can carve up your list into greater detail. For instance, you might uncover the delta values of traded options. Delta helps you surmise how much the price of an option might move relative to its underlying security or index.

The tool also looks at patterns. For instance, the Sizzle Index® feature takes a look at where the volume of the options and the underlying stock are at today relative to five-day average volume. So, if the Sizzle Index reading is 3.00, 30 contracts are trading compared to the five-day average of 10. Sort of makes you want to look for the story behind the numbers, doesn’t it? Why are these particular options in such hot demand today?

Trader Math Chart

FIGURE 1: VIEW OF TODAY'S OPTIONS STATISTICS ON THINKORSWIM® Once on the platform, hit Trade tab > All Products > enter symbol > expand Today's Options Statistics or Options Time & Sales. For illustrative purposes only.

There’s more. A closer look at implied volatility (IV) and historical volatility (HV) can help uncover market intelligence. It’s right there on your toolbar, too. The IV and HV percentiles shown on the tool offer a quick comparison between where these numbers stand today and their 52-week high and low. So, for instance, the higher the volatility, the greater the premium priced into the options.

We even managed to work in the volume-weighted average Price (VWAP) within this tool, which can help you determine if a security might be overbought or oversold. We won’t spook you with the VWAP equation, but if you want a peek at the calculation, check it out here. Enough on stats? Good, because we’re done for today (I assume you answered yes).

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Market volatility, volume, and system availability may delay account access and trade executions.

Past performance of a security or strategy does not guarantee future results or success.

Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.

Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.

The information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.

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