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.
Useful thinkorswim tools you can use are the Heat Map, volatility calculation and Mobile Trader. Find out which stocks are moving, different ways to calculate volatility and share charts on Mobile Trader.
Calendars and butterfly strategies may look similar but they have their differences. Why would you choose one over the other?
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.
TDA Network from Trader TV on thinkorswim® may give you many strategy ideas during the trading day. Watch and listen to learn about making a trading plan, analyze trades, paper trade, and then consider making a trade.
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.
The sensitivity of option prices to changes in time, volatility, and the price of the underlying are commonly referred to as “Greeks.” As you prepare for earnings season, here's an overview.
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.
Making profitable adjustments to your stock portfolio can be tough. Learn more about three important metrics you can use to manage your investments.
Consider these options strategies designed to increase your overall odds.
Options on futures are quite similar to their equity option cousins, but a few differences do exist.
As the front-month leg of a calendar options spread approaches expiration, a decision must be made: close the spread or roll it.
Are you an option looking for a strategy designed for a lower-volatility environment?
Learn how weekly stock options can help you target your exposure to market events such as earnings releases or economic events.
Core positions are treated differently among investors and traders. Learn more about leveraging your trading portfolio and managing core positions.
Are you getting the most out of your iron condor stock trades? Double diagonals could help you do just that. Learn more about options trading.
Learn how to dynamically hedge changes in an option position’s delta in a process known as “gamma scalping.”
Some option traders dynamically hedge positions, but doing so requires a basic understanding of synthetic positions and put-call parity.
Learn about gamma, which some traders consider the positive side of negative theta.
If you have a directional view on a stock price, buying a vertical spread might be for you. But deciding on strikes and strike widths requires some thought.
Some economic indicators create more noise than others—learn to create trading strategies based on how markets might react to economic data.
Instead of hyper-focusing on one position at a time, look at your entire portfolio and try to figure out a better hedge—here's some tools and tweaks to help.
Looking for opportunities amid a low volatility trading environment? Learn about calendar spreads.
Overtrading can be a killer to your P/L. The trick is to trade
consistently and always know what the markets—and your positions—are doing.
Part of our series on portfolio margin, the greeks—theoretical metrics describing how things like stock price, time, and volatility can impact option price.
Learn how to increase the flexibility of your existing options strategies with weeklys: options that move quickly and live for about a week.
Earnings season is upon us again and the elections are right around the corner. Learn options strategies to trade earnings season and the upcoming elections.
The greeks option traders use are loved by many, but understood by few. Know the false “truths” about option greeks to better manage your trades.
Weeklys on SPX: Now options traders have even more toys to play with... and more to chew on. Find out about them before changing your trading strategy.
The calendar trade is a strategy that belongs in every trader’s arsenal, partly because calendars are easily adjusted, and also handy for weekly options.
Sometimes the options market can signal when it’s time to adjust a trade. But how long should options traders stick with an adjustment plan?
With an understanding of terms and definitions involved in synthetic options, how do traders begin applying synthetic options in the most efficient way?
Can you use call options as a substitute for long stock? Learn the benefits and risks of this strategy.
Learn how synthetic options strategies can help traders potentially lower transaction costs, improve price discovery, and more efficiently use capital.
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.
Want to participate in the potential upside of a stock while using only a fraction of the buying power? Here’s how to do it with a long-dated call option.
Industry data shows options trading numbers are growing. But many stock traders remain hungry for options trading basics. Here’s how to get started.
Income-focused option trades succeed when the market doesn’t move that much. Learn how to recognize income opportunity.
Volatility’s tendency to level out after a spike can present strategy opportunities, especially selling strategies found with strangles and iron condors.
Tackle the sticker shock of a lofty stock market with an options play. Consider lowering your cost basis by selling puts.
Check out short-term options pricing to gain a sense of how the underlying stock could move around an earnings release. You can track straddles or use the TD
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.
Buying calls and puts is
how most traders jump into the options
market. Despite their siren songs, you can still
attempt to protect yourself.
Weekly options were introduced by the Chicago Board Options Exchange in 2005. Now they’re all the rage, especially as more traders use them to position for earnings releases.
Liquidity, cost, and overall tradability turn options strategies that are similar on paper into real-life scenarios that look quite different.
Even if you're a seasoned thinkorswim^®^ user, odds are, some of its tools are unfamiliar. Dig in for some features with a big bang for your buck.
The first step to overcoming any fear is understanding what you're dealing with. With short-naked puts, that means understanding the strategy and the risks.
Options greeks can help measure how much an option might gain or lose—and help you decide how much risk you’re willing to take.
We know stocks move up and down. But much of the time, they're range-bound. The calendar spread takes advantage of that at a fraction of the stock price.
A guide to weeklys: Volume is swelling, and traders are using weekly options to speculate on very short-term moves, or simply as a hedge.
Before buying or selling call and put options, check the alternatives. The vertical spread is a simple solution to the problems short naked options pose.
Diversification approaches for active traders to hedge non-systematic risk across spreads, including directional risk and time and vol.
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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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