thinkTank: Think Outside the Box

When you look beneath the Analyze tab on thinkorswim®, you may find some features you may not have known about.

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5 min read
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Key Takeaways

  • Explore the different ways to customize the Option Chain layout in the thinkorswim® platform
  • Today’s Options Statistics can help break down volatility and get a better idea of the order flow
  • Viewing volatility skew can help identify unusual options behavior

How often do you analyze the risk/reward trade-off for a potential options trade, then second-guess your decision and end up not placing the trade? It happens. Trading gives rise to anxiety and, as a result, when it’s crunch time, you may look for anything to procrastinate placing the trade—munch on snacks, watch cat videos, play with your phone, and so on.

Fortunately, there are some tools you could apply that might help reduce the pre-trading anxiety. Let’s focus on the Analyze tab on thinkorswim®. There are many features that can be found on this tab, but traders often stick to the default settings. Here are three others to consider.

Custom layouts for the Option Chain. There’s virtually no limit to how you can customize the Option Chain on thinkorswim (see figure 1).

custom layout feature in the options chain in thinkorswim

FIGURE 1: CREATING A CUSTOM LAYOUT IN THE OPTION CHAIN. There’s a lot of flexibility when it comes to displaying relevant information in the Option Chain. Chart source: The thinkorswim platform. For illustrative purposes only. Past performance does not guarantee future results.

  1. Filter based on parameters such as side (puts, calls, or both), expiration type (regular, quarterly, or weekly), days to expiration, and strike price. You can also choose to display the Option Chain by spreads. Select the Spread menu to see all your choices. You can also select the number of strikes to display.
  2. Suppose you choose to display four strikes. You can select the Expand all drop-down panels on the far right of the Option Chain. This displays the strikes for all the options in the chain. 
  3. To customize the column layout, select the Layout menu. Here, you’ll find a bunch of customized layouts. You can also create your own from the Customize… menu. 
  4. Select the variables you want in your layout from the Available Items column and add them to the Current Set. To save this layout, again, select Layout, then Save As..., and give it a name. It’ll be listed at the bottom of the menu. You could also select the column title and, from the menu, select what you want displayed.

Options Statistics. Want to break down volatility (vol) and know more about the options order flow? That’s where Today’s Options Statistics could help. Note it’s divided into three sections (see figure 2). On the left is the vol breakdown; the middle section looks into the order flow; and the section on the right breaks down the Sizzle Index


    options stats on thinkorswim
    FIGURE 2: VIEWING THE STATS. Get an overall view of a security’s vol, call and put activity, and any unusual options activity. Chart source: The thinkorswim platform. For illustrative purposes only. Past performance does not guarantee future results.

      1. The vol section gives you an idea of whether vol is on the low or high side. You can see where implied volatility and historical volatility are relative to where they’ve been in the past year.  
      2. The order flow displays volume on calls, puts, and the total. As an example, if more calls are trading, you’ll be able to figure out if there’s greater emphasis at the bid, ask, or somewhere in between. You’ll see what percentage of the total volume took place at the bid. The section titled Delta Between gives you an idea of the options trading activity for an underlying. 
        1. The Sizzle Index indicates if more traders are buying or selling calls or puts. In a nutshell, a Sizzle Index of 0.5 suggests prevailing volume is around half the average for a specific security. Think of the Sizzle Index as a scanner of potential unusual options activity.

          Product depth. Speaking of unusual options activity, let’s move on to vol skew. Skew indicates if the markets are behaving normally. Typically puts are more expensive than calls, but sometimes the skew can be reversed or flat. Product Depth, found below Today’s Options Statistics, is a graphical representation of the skew (see figure 3).

          viewing vol skew on thinkorswim
          FIGURE 3: VIEWING VOL SKEW. Product Depth displays the volatility skew for an underlying asset. Explore different ways to view the skew. The shape of the skew and comparing the skew of calls and puts could help you identify unusual options activity. Chart source: The thinkorswim platform. For illustrative purposes only. Past performance does not guarantee future results.

            1. Select Product Depth (make sure to select it from the settings on the top right).
            2. Select Options (you could select Futures also), then from the Show menu, select the type of options you wish to see (All, Calls, Puts, OTM, Average). 
            3. Select any number of expirations you want to visualize.
              1. Select the number of strikes.
                1. From the Value menu, select Impl Vol (there are other choices available).

                  Knowing the skew could help strategy and strike price selections.

                  It’s a good idea to explore the many features available on the thinkorswim platform. Knowing your tool choices could help you make more confident decisions when placing trades.  



                  Jayanthi Gopalakrishnan is not a representative of TD Ameritrade, Inc. The material, views, and opinions expressed in this article are solely those of the author and may not be reflective of those held by TD Ameritrade, Inc.

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                  Key Takeaways

                  • Explore the different ways to customize the Option Chain layout in the thinkorswim® platform
                  • Today’s Options Statistics can help break down volatility and get a better idea of the order flow
                  • Viewing volatility skew can help identify unusual options behavior

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