In the Money

The Win/Loss Conundrum: Understanding the Odds September 28, 2020 10:30 AM   |  

When you've got trades on, you typically focus on your profits or losses. But you could lose more times than you win and still come out ahead. Learn how to use probabilities to manage your options positions.

5 min read  |  thinkMoney Magazine
Puts & Ladders for Your IRA September 28, 2020 10:30 AM   |  

A buy and hold strategy may be good for long-term investments. Bit when circumstances change, a long-term strategy may not be flexible enough. Laddering puts across price and time could help when stock markets are volatile.

5 min read  |  thinkMoney Magazine
The Fearless Technician: Fibonacci & Strike Selection September 28, 2020 10:30 AM   |  

If you're trying to figure out what strike prices to use for your options strategies you might want to try using Fibonacci retracement levels.

5 min read  |  thinkMoney Magazine
Arbitrage Camouflage: The Invisible Hand Keeping Stock, Bond, and Options Prices in Line September 14, 2020 10:30 AM   |  

Arbitrage helps keep financial markets efficient, often with the aid of complex algorithms, pricing models, and lots of capital. Here’s a look at three types—index arbitrage, volatility arbitrage, and bond arbitrage.

5 min read  |  Trading Basics
When Calendar Met Vertical: A Diagonal Spread Tale September 2, 2020 11:52 AM   |  

Compared to covered calls and other basic options strategies, diagonal spreads don’t get a lot of love. But not only are they relatively straightforward, they’re also flexible and versatile. Here’s the story.

7 min read  |  Advanced Options Strategies
Viewing Options Volatility Through a Different Set of Lenses August 25, 2020 10:37 AM   |  

Volatility is a popular topic among option traders. But it can be confusing. Looking at volatility from the perspective of trading capital, past activity, and probability may help clear things up.

7 min read  |  Advanced Options Strategies
TTM Squeeze Indicator: Technical Signals for Option Traders August 21, 2020 10:30 AM   |  

How do you know when a consolidating market is about to trend? Consider using the TTM Squeeze indicator to help you decide if a market is going to switch.

2 min read  |  thinkorswim Platform
Ask the Trader: How Might My Long Option Perform? Using the Theoretical Price Tool July 16, 2020 10:30 AM   |  

Suppose you buy a call option at a given strike price. Now what? The Theo Price tool on thinkorswim can help you assess what it could mean for your trade if the underlying stock reaches your price target by a certain date, if it goes the other way, if implied volatility changes, and more.

8 min read  |  thinkorswim Platform
To Hold or Fold that Options Position: 3 Questions You Should Ask Yourself June 30, 2020 10:30 AM   |  

When you make an options trade, you’re not typically locked into it until expiration. You can place an order to close it out most of the time. Here are three things to ask yourself when considering an options exit.

5 min read  |  Options Trading Basics
Portfolio Margin Trading Leverage & Risk Management June 29, 2020 9:30 AM   |  

Traders should become very familiar with margin trading, especially since it comes in many forms. Learn about the different types of margin accounts and how you can climb up the margin ladder and make your way up to portfolio margin status.

5 min read  |  thinkMoney Magazine
Uncovering the Covered Call: An Options Strategy for Enhancing Portfolio Returns June 12, 2020 4:37 PM   |  

Selling covered calls is a neutral to bullish trading strategy that can help you make money if the stock price doesn't move.

7 min read  |  Options Trading Basics
Exercise, Assignment, and More: A Beginner’s Guide to Options Expiration June 12, 2020 6:26 AM   |  

The time to learn about options exercise and assignment is before taking a position, not afterward. This guide can help you navigate the dynamics of options expiration.

5 min read  |  Options Trading Basics
Interest Rates Move. How Does That Affect Options Prices? April 2, 2020 10:30 AM   |  

The effect of interest rates on options prices—rho—is sometimes considered the forgotten greek. But interest rates matter, especially when deciding when to exercise options positions.

5 min read  |  Options Trading Basics
Trading Volatility: Well, That Wasn't Supposed to Happen! March 30, 2020 9:30 AM   |  

Even your best trading plans can change because options greeks such as delta, theta, and vega are constantly changing. if you have a portfolio with many positions, managing trades can be difficult. These guidelines can help keep you on track.

5 min read  |  thinkMoney Magazine
Small Account Stock Trading: Tiny Doesn’t Mean You Can’t Dance January 6, 2020 9:30 AM   |  

A small trading account shouldn’t stop you from trading like traders with large accounts. Here are three options trading strategies to let you trade lower-priced stocks with similar risk/return as more expensive stocks.

5 min read  |  thinkMoney Magazine
Credit or Debit Options Spreads? How Do You Choose? January 6, 2020 9:30 AM   |  

Vertical spreads are a common choice for options traders looking for a flexible defined-risk strategy. But how do you choose among strategies? Here's a handy checklist to follow.

5 min read  |  thinkMoney Magazine
Ask a Trader: When High Volatility Hits, Should I Switch from Long to Short Options Strategies? November 12, 2019 3:39 PM   |  

Should you switch from trading long options strategies to short options strategies when volatility levels are high? Sometimes prices are high for a reason.

5 min read  |  Options Trading Basics
Delta: A Little Goes a Long Way September 30, 2019 10:15 AM   |  

Delta contains information that matters most when you are looking for a profit. But there is more to delta.

3 min read  |  thinkMoney Magazine
How to Hedge Your Portfolio September 30, 2019 10:15 AM   |  

There are different ways a basic options strategy can offer some protection for a limited period of time for most stock portfolios. One strategy you could apply is using index options as a hedging tool.

3 min read  |  thinkMoney Magazine
It's Not You, It's Me: Recovering From Mistakes August 2, 2019 10:15 AM   |  

If you’ve got a losing trade, deal with it and move on—here's a recovery process designed to potentially get you back on track if you make any one of four big mistakes.

5 min read  |  Trading Psychology
Pairs Trading: The Third Dimension of Trading June 30, 2019 11:47 AM   |  

Pairs trading is a trading strategy that involves two stocks in the same sector. There are different ways to create a pairs trade, whether you are pairing two stocks, stocks and ETFs, stocks and options, or options and options.

5 min read  |  thinkMoney Magazine
Theta: Time Waits for No Trader April 1, 2019 3:00 AM   |  

Options have time decay, or theta, which is why as an option approaches expiration, it may lose extrinsic value. If you want to maintain a certain level of theta for a particular strategy, monitor your positions closely.

6 min read  |  thinkMoney Magazine
On Your Mark … Get SET … Wait! April 1, 2019 3:00 AM   |  

An index’s settlement can turn a winning position into a losing one. You may want to close your index positions before expiration.

4 min read  |  thinkMoney Magazine
Going Vertical: Using the Risk Profile Tool for Complex Options Spreads March 28, 2019 4:00 AM   |  

Once you’ve learned to use the Risk Profile tool on the thinkorswim® platform for single-leg options, you may wish to use it for more complex trades.

3 min read  |  Advanced Options Strategies
Options Strategy Basics: Looking Under the Hood of Covered Calls March 5, 2019 4:00 AM   |  

Learn how a covered call options strategy can attempt to sell stock at a target price; collect premium and potentially dividends; and limit tax liability.

8 min read  |  Options Trading Basics
Calendar vs. Butterfly: The Ultimate Premium Smackdown January 7, 2019 3:00 AM   |  

Calendars and butterfly strategies may look similar but they have their differences. Why would you choose one over the other?

6 min read  |  thinkMoney Magazine
Portfolio Theory for the Little Guy January 7, 2019 3:00 AM   |  

Options traders with smaller accounts may be able to manage their portfolios like a portfolio manager. Long call verticals, short put verticals, and long call diagonals can help expand an option trader’s thinking beyond their trading account and look like a pro.

7 min read  |  thinkMoney Magazine
Small Trades: Formula for a Bite-Size Trading Strategy November 15, 2018 4:00 AM   |  

Trading success doesn't mean "going for broke," or searching for the next big thing. It's more like pacing yourself at the hippest restaurant in town.

7 min read  |  Options Trading Basics
Putting “Too Good to Be True” to Use October 1, 2018 3:00 AM   |  

Traders sometimes talk glowingly about thrilling options trading strategies without considering the risks. There are some alternative strategies such as short out-of-the-money verticals that you could consider to better manage your risks.

7 min read  |  thinkMoney Magazine
Four Big Myths About Volatility and How to Debunk Them October 1, 2018 3:00 AM   |  

When markets are volatile you may hear the media come up with different explanations. But how reliable is that information? There are four myths about volatility you may often hear and why they may not necessarily be true.

6 min read  |  thinkMoney Magazine
Body and Wings: Introduction to the Option Butterfly Spread July 31, 2018 4:00 AM   |  

Learn about butterfly option spreads and how they differ from iron condors, plus an explanation of a butterfly option strategy.

5 min read  |  Advanced Options Strategies
Options Volatility Q&A: VIX, Skew, and the Rule of 16 July 25, 2018 4:00 AM   |  

Do you follow the VIX as a volatility measure? Ever heard of the rule of 16? How about volatility skew? Learn how to apply these concepts to options trading.

2 min read  |  Options Trading Basics
Toppy Markets and Heavy Bottoms: Bullish Strategies For Under $1,000 July 16, 2018 3:00 AM   |  

Long call vertical spreads, short put vertical spreads, and call ratio backspreads are defined risk bullish option strategies with relatively low capital requirements that could offer upside potential.

7 min read  |  thinkMoney Magazine
Wanna Trade Your Retirement Account? July 16, 2018 3:00 AM   |  

You may be able to trade options in an IRA. Learn more about IRA options trading in this article.

5 min read  |  thinkMoney Magazine
Unpacking Gamma—Delta’s Evil Enabler July 16, 2018 3:00 AM   |  

Losses can creep up on you quickly. As time passes gamma could grow more than deltas, which is why you should keep an eye on gamma and delta. Find out about gamma scalping and managing a position’s gamma.

6 min read  |  thinkMoney Magazine
Earnings: Volatility’s Siren Song—Save Yourself From Surprises April 23, 2018 12:00 AM   |  

Implied volatility usually increases ahead of earnings announcements and then drops after the news release. If you know implied volatility is going to drop after earnings reports, here are three options trading strategies you could trade.

8 min read  |  thinkMoney Magazine
Fixing a Good Trade Gone Bad: Four Ways To Save a Losing Trade April 22, 2018 6:04 AM   |  

You have a losing trade but don’t want to sell. Here are four option strategies you could use to fix your losing trades.

7 min read  |  thinkMoney Magazine
Decisions, Decisions: Understanding Option Probabilities March 28, 2018 8:00 PM   |  

Learn how option delta calculations and the Probability ITM (in the money) feature can help gauge the risk in an option position. Let TD Ameritrade guide you through the math to aid your decision making.

5 min read  |  Options Trading Basics
Options Expiration: Definitions, a Checklist, and More February 18, 2018 11:00 PM   |  

Options expiration day can be a time of volatility, opportunity and peril. Trading and selling options on expiration day requires an understanding of the process, here are a few things you need to know.

7 min read  |  Advanced Options Strategies
Derivatives with Tax Benefits: Five Tax Options for Traders February 5, 2018 7:00 PM   |  

If options and other derivatives are a part of your portfolio, you should learn about the nuances of taxes on options trading, from the Ticker Tape by TD Ameritrade.

4 min read  |  Tax Strategy
Option Collar Options: Rolling Up, Rolling Down, Rolling Out ... January 3, 2018 11:00 PM   |  

Learn how adjusting an options collar strategy—a covered call and a protective put—can help you manage stock risk.

4 min read  |  Advanced Options Strategies
Options and Calendar Spread Decision Time: Close It or Roll It? November 29, 2017 11:00 PM   |  

As the front-month leg of a calendar options spread approaches expiration, a decision must be made: close the spread or roll it.

4 min read  |  Advanced Options Strategies
Your Options ABCs: Basic Call and Put Option Strategies October 26, 2017 12:00 AM   |  

Though some option strategies are quite complex, options education begins with the basics of calls and puts.

5 min read  |  Options Trading Basics
Scalping the Gamma: Dynamic Hedging of Option Positions September 28, 2017 12:00 AM   |  

Learn how to dynamically hedge changes in an option position’s delta in a process known as “gamma scalping.”

5 min read  |  Advanced Options Strategies
Gamma Scalping Intro: Synthetics, Put-Call Parity and Delta-Neutral September 21, 2017 12:00 AM   |  

Some option traders dynamically hedge positions, but doing so requires a basic understanding of synthetic positions and put-call parity.

3 min read  |  Advanced Options Strategies
Got a Directional View? Here’s an Option Spread to Consider August 31, 2017 12:00 AM   |  

Learn how to structure a trade designed for uncapped profit potential.

6 min read  |  Advanced Options Strategies
Look Before You… Get Assigned July 24, 2017 12:00 AM   |  

Know what you're getting into before putting on that option trade—avoid surprises by educating yourself about the risks and oddities of assignment.

7 min read  |  Advanced Options Strategies
A Short-Term Fling or Puttin’ On the Ring? July 24, 2017 12:00 AM   |  

Can't decide how long you want to commit to a position? Understanding strategy mechanics can help you align trade duration with your attraction.

8 min read  |  Advanced Options Strategies
Capiche? Portfolio Margin Part 3: Profit, Loss, and Expiration July 24, 2017 12:00 AM   |  

Part 3 of our series on portfolio margin covers profit, loss, and what happens at expiration—eventually your position will expire, know what to expect.

3 min read  |  Margin
Who Adjusted My Options? And Other Corporate Action Questions June 22, 2017 12:00 AM   |  

Corporate actions such as stock splits, special dividends, mergers and acquisitions are quite common, but what happens with unexpired options?

5 min read  |  Advanced Options Strategies
Vol Whisperer: Volatility Unleashed January 8, 2017 11:00 PM   |  

If you have a futures account and understand VIX, you might be ready for a covered call in volatility—long /VX futures and short VIX calls.

2 min read  |  Advanced Options Strategies
Capiche: Leverage Into A Margin World January 8, 2017 11:00 PM   |  

You can upgrade your trader status by expanding your leverage with portfolio margin, but first you must know synthetic equivalents—here's a primer.

2 min read  |  Margin
DIY Guide to Options Trading: Ask and Bid to Trade Options November 1, 2016 12:00 AM   |  

Investors and traders alike can benefit from options by learning how they work and how to apply this knowledge to meet their investing goals.

4 min read  |  Options Trading Basics
Trading Futures: Futures Scalper’s Guide to the Galaxy September 28, 2016 12:00 AM   |  

Arbitrary entry and exit points in futures trading can be futile—learn how to place your trades using a price range based on volatility and probability.

8 min read  |  Futures
Covered Calls in the Fast Lane: Ladder Price, Volatility, and Time September 28, 2016 12:00 AM   |  

Laddering price, volatility, and time can take covered calls to a new level—look to collect more premium and diversify across vol and time.

8 min read  |  Advanced Options Strategies
Income Options: Selling Covered Calls, Selecting Strategic Strikes August 24, 2016 12:00 AM   |  

Covered calls are one way to earn income from stocks you own. Learn more about how to sell covered calls and strategically select strike prices.

3 min read  |  Options Trading Basics
More than Meets the Eye: Reading Put/Call Options Ratios August 9, 2016 12:00 AM   |  

The put/call ratio (p/c ratio) is probably one of the most recognizable option statistics. But how well is it understood?

2 min read  |  Options Trading Basics
Three Things That Keep Traders Awake at Night July 5, 2016 7:50 AM   |  

These strategies to help you sleep at night by reducing your losses, reducing your effective cost, and reducing the possibility of assignment.

7 min read  |  Trading Psychology
Long Stock versus Long Call: Exploring Your Options May 11, 2016 12:00 AM   |  

Can you use call options as a substitute for long stock? Learn the benefits and risks of this strategy.

2 min read  |  Options Trading Basics
Rolling Along: Knowing When to Adjust an Option Trade May 5, 2016 12:01 AM   |  

Adjustments can be an integral part of any option trade, but knowing when to adjust can be tricky.

3 min read  |  Options Trading Basics
Looking for Option Strikes? How Delta Can Help Balance Risk April 28, 2016 12:01 AM   |  

Delta is much more than a one-trick pony. Understanding some other tidbits of info delta provides can help a trader select option strikes.

3 min read  |  Advanced Options Strategies
The Trader's Cure For the Volatility Blues April 12, 2016 4:00 AM   |  

Potential strategies for a depressed VIX—When volatility is low, learn how to hedge a trader's version of "yield" by trading volatility as an asset class.

10 min read  |  Advanced Options Strategies
Beyond the Basics: Calendar Spreads 3.0 April 12, 2016 4:00 AM   |  

What’s a handy core options strategy that leverages time? The calendar spread. But there’s more to them than just buying and waiting.

6 min read  |  Advanced Options Strategies
Know Your Risk Profile: Selecting and Culling Option Strikes April 7, 2016 12:01 AM   |  

Having trouble selecting a strike price for an options trade? Learn how the Risk Profile tool can help select options that align with your trading strategies.

4 min read  |  Options Trading Basics
Option Calls Holders: Don’t Get Pinched By Ex-Dividend Risk October 28, 2015 8:00 PM   |  

Long call option traders avoid ex-dividend stock inequality by exercising the call and becoming a shareholder of record. Just watch timing and new stock risk.

4 min read  |  Advanced Options Strategies
Rolling: The Art and Science of Extending a Trade's Duration August 2, 2015 8:00 PM   |  

Explore rolling options “losers” to extend duration for covered calls, naked calls or puts, one side of a short strangle, and select other trades.

3 min read  |  Advanced Options Strategies
Keep Your Pants On: From a Naked Put Sale to a Call Purchase June 3, 2015 8:00 PM   |  

Look beyond options premium collection to additional stock hedging. Consider turning the cash from a naked put sale into an out-of-the-money call purchase.

4 min read  |  Advanced Options Strategies
Reading the Alt Crowd: Gauging Stock Momentum with Options April 27, 2015 11:11 PM   |  

To gauge a stock trend, it's all in the charts. But what about its options? You may not be trading options, but ignore them, and you may be missing the bigger picture.

8 min read  |  thinkorswim Platform
Out-of-the-Money or In-the-Money Spreads? How to Choose March 26, 2015 5:00 AM   |  

Liquidity, cost, and overall tradability turn options strategies that are similar on paper into real-life scenarios that look quite different.

2 min read  |  Advanced Options Strategies
Option Strategies to Help Protect Your Portfolio February 5, 2015 8:00 AM   |  

Basic options strategies can help investors protect portfolios against inevitable market volatility and market crashes.

5 min read  |  Portfolio Strategy
Stop Signs, Schlop Signs: Option Tricks for IRA No-Nos January 1, 2015 12:00 PM   |  

With IRAs, plenty of stop signs tell you what you can and can’t do with options. Are there workarounds?

8 min read  |  Options Trading Basics
Trade Analysis Focus: The Answer Butler For Your Trades April 1, 2014 5:10 PM   |  

Our chief market strategist breaks down the day's top business stories and offers insight on how they might impact your trading and investing.

10 min read  |  thinkorswim Platform
Trading Momentum Without a Chart April 1, 2014 5:07 PM   |  

Picking months and strikes are big decisions for options traders. Do probabilities matter? We think so.

8 min read  |  thinkorswim Platform
Short Strategy Primer: Shut Up and Sell April 1, 2014 4:56 PM   |  

Short options aren't as scary as you might think. The trick to being on the right side of a short trade starts with the right info.

6 min read  |  Options Trading Basics
VIX Futures: The Unfair Advantage January 1, 2014 4:43 PM   |  

I was happy when CBOE VIX futures were added to TD Ameritrade’s thinkorswim® platform. So, it’s not running with the bulls in Pamplona. But I’m a trader...

7 min read  |  Futures
Did You Really Go There? High-Probability Options Trading June 5, 2013 3:33 PM   |  

Anything can happen in one trade. But over a large number of options trades, high probabilities are what matter most.

4 min read  |  Advanced Options Strategies
Special Focus: Vertical Spreads. Up, Down ... Who Cares? January 1, 2013 4:35 PM   |  

Buying calls and puts is great when the stars align. For the spread trader, anything is possible. And the vertical spread is all where it begins.

11 min read  |  Advanced Options Strategies
Money Walks, Options Talk: Analyzing Option Prices January 1, 2013 4:30 PM   |  

Option prices can speak louder about the state of a stock than most analysts. You just have to listen and understand what they're trying to say.

8 min read  |  Options Trading Basics
Mirror, Mirror: Synthetic Options Strategies for the Little Guy June 30, 2012 8:00 PM   |  

Hedging with synthetic options positions makes sense if you're a market maker. While retail traders don't have as much to gain, they can still learn a lot.

10 min read  |  Advanced Options Strategies
Hedge Gaps and Party Hats: Trading with SPXpm Options March 31, 2012 8:00 PM   |  

A favorite hedge among options traders, SPX options have one major blemish: they settle the day after trading. Say goodbye to the old, and say hello to SPXpm.

6 min read  |  Advanced Options Strategies
Hedge… Not a Four-Letter Word: Hedging Tricks With Options October 1, 2011 9:46 AM   |  

Whatever your time frame, if you’re hedging with options here's a few tricks about how to size things up.

7 min read  |  Advanced Options Strategies
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