Vertical Spread

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
Vega: It's Not the Number You're Thinking June 30, 2019 11:45 AM   |  

Vega can show you how much the dollar value of an option changes for every one percentage point change in volatility. But traders often confuse vega with volatility. Knowing the right way to use vega can help you come up with an options trading strategy.

6 min read  |  thinkMoney Magazine
Looking for a Potential Edge? Options Stats, Pre-Sliced and Diced on thinkorswim May 29, 2019 4:00 AM   |  

Explore options statistics on thinkorswim—implied & historical vol and percentiles, the Sizzle Index, and the put/call ratio. Learn how options stats can help traders and investors make more informed decisions.

5 min read  |  Options Trading Basics
Market Doldrums? Five Options Strategies for Low-Volatility Environments April 30, 2019 4:00 AM   |  

When volatility falls, many option traders turn to these five strategies designed to capitalize on depressed volatility levels.

3 min read  |  Advanced Options Strategies
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
Iron Condor Strategies: A Way to Spread Your Options Trading Wings March 25, 2019 4:00 AM   |  

Vertical spreads are fairly versatile when making a directional stance. But what if you're stuck in a range-bound market? Consider the iron condor.

3 min read  |  Advanced Options Strategies
The Exciting World of Trading Treasury Bonds (Seriously) February 27, 2019 4:00 AM   |  

Treasury bonds are boring, right? Wrong. For traders, they represent a market that can be bigger than stocks.

11 min read  |  Futures
Return On Capital: The Great Decider October 1, 2018 3:00 AM   |  

Return on capital when trading options is different than return on capital when managing investments. Here’s what return on capital means to an options trader.

3 min read  |  thinkMoney Magazine
Vertical Credit Spreads: Your High-Probability Trade? September 7, 2018 6:00 AM   |  

Selling vertical credit spreads, and how it may be a high-probability strategy.

5 min read  |  Advanced Options Strategies
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
Three Steps from Idea to Trade July 16, 2018 3:00 AM   |  

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.

6 min read  |  thinkMoney Magazine
Exit Options Strategies: Ready to Get Out or Roll On? June 22, 2018 4:00 AM   |  

Three options strategies on how to exit a winning or losing trade: long options, vertical spreads, and calendar spreads.

5 min read  |  Advanced Options Strategies
Vertical Spreads vs. Single-Leg Options: Comparing Risk & Reward June 4, 2018 4:00 AM   |  

Learn how vertical spreads can be a more cost-effective way to speculate on direction, versus buying single legged options like a long call or long put.

5 min read  |  Options Trading Basics
Lower Margin Requirements with a Vertical Option Spread January 30, 2018 7:00 PM   |  

There is a way to turn naked options into risk-defined positions to lower the margin requirements and free up capital at the same time. The strategy: a vertical spread.

4 min read  |  Advanced Options Strategies
Do the Math: Calculating Risk and Potential Profit on Vertical Spreads August 24, 2017 12:00 AM   |  

Learn to calculate profit and loss and assess risk parameters on vertical option spreads.

3 min read  |  Options Trading Basics
Going on Strike: Consider Widths when Buying Vertical Spreads August 3, 2017 12:00 AM   |  

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.

3 min read  |  Advanced Options Strategies
Proportional Proposal: An Intro to Put Ratio Options Spreads July 27, 2017 12:00 AM   |  

Learn the basics of put ratio spreads and how they can help you pursue your objectives.

4 min read  |  Advanced Options Strategies
Unbalanced Butterfly: Tilting the Odds April 17, 2017 12:00 AM   |  

How to tweak a butterfly when you have strong directional bias, time to expiration is short and you want to squeeze as much as you can out of your position.

8 min read  |  Advanced Options Strategies
Turning a Short Option Into a Risk-Defined Vertical February 23, 2017 11:00 PM   |  

There is a way to turn naked options into risk-defined positions and free up capital at the same time. The strategy: a Vertical spread.

4 min read  |  Advanced Options Strategies
Ready to Go Vertical? Options Spreads with Versatility January 25, 2017 11:00 PM   |  

Ready for a more advanced options trading strategy? We explain vertical spreads (credit and debit).

4 min read  |  Options Trading Basics
Long Tooth, Busted Jaw: Three Signs a Trend May End December 31, 2015 11:00 PM   |  

When will a stock trend end? There are a few stock chart indicators that make spotting trend reversal warning signs a little easier.

6 min read  |  Charting
Rethink Options: Aim for Income by Embracing Market Inaction November 23, 2015 7:00 PM   |  

Income-focused option trades succeed when the market doesn’t move that much. Learn how to recognize income opportunity.

4 min read  |  Options Trading Basics
Option Strategy Throw Down: Selling Strangles vs Iron Condors October 7, 2015 8:01 PM   |  

Volatility’s tendency to level out after a spike can present strategy opportunities, especially selling strategies found with strangles and iron condors.

5 min read  |  Advanced Options Strategies
Taking a Dive Into the Not-So-Deep End: Defined-Risk Trading October 1, 2015 7:32 PM   |  

Maximizing the risk/reward of a defined-risk trade—how to increase the risk-to-reward profile in short vertical spreads.

5 min read  |  Advanced Options Strategies
Market Grudge Match: Enter a Trade Using Volatility or Price? October 1, 2015 6:03 PM   |  

Use volatility to pick an options strategy to speculate on a given direction, rather than to replace fundamental analysis and charts to determine potential.

7 min read  |  Options Trading Basics
Fine-Tuning: Option Adjustments for Losing Trades September 16, 2015 8:01 PM   |  

Choose adjustments for losing trades that are true to your market outlook, risk tolerance, and trading style.

3 min read  |  Options Trading Basics
How to Use Chart Divergences as Leading Indicators September 7, 2015 8:00 PM   |  

Learn to recognize divergences between chart indicators and price action. It’s the first step toward confirming trends.

5 min read  |  Charting
Choosing Credit Spreads vs. Debit Spreads: Let Volatility Decide July 15, 2015 8:00 PM   |  

Align your option vertical spread with the level and direction of implied volatility to position your trade for success.

2 min read  |  Advanced Options Strategies
Trading is (Not) Gambling: Why the Naysayers are Wrong April 27, 2015 10:05 PM   |  

The principles of successful trading are also rooted in the professional side of the card table rather than pure luck. The trick isn’t just knowing when to hold 'em, or fold 'em, but why.

8 min read  |  Options Trading Basics
Out-of-the-Money Spreads: Potentially Expand Profit Options January 12, 2014 9:31 PM   |  

For options speculators with less of an appetite for risk, these vertical spreads offer up a savory solution.

5 min read  |  Advanced Options Strategies
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
Stretch Your Options Muscle with Vertical Spreads December 23, 2012 8:50 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.

4 min read  |  Options Trading Basics
Fearless Technician: Get Your TTM Squeeze On October 1, 2012 6:57 PM   |  

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
Options on Futures: Familiar Ground … Sort Of October 1, 2012 12:31 PM   |  

Yes, you can have a derivative on a derivative. But don’t let that scare you. Options on futures may be easier to understand than you think.

13 min read  |  Futures
To Leg or Not to Leg into an Options Spread? January 1, 2012 11:04 AM   |  

Because an options spread has more than one "leg," does it make sense to enter one leg at a time if you can get a better price on a different exchange? Maybe.

3 min read  |  Advanced Options Strategies
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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.

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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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