ThinkorSwim Option Trading Trick || Active Trader

this is gonna be a quick introduction into a little tip or trick I guess we could say for TD Ameritrade thinkorswim application and this is for treating options this is a little trick I use to get faster executions to get better entries and for me to really mess around with my orders to get the best possible fill price because I know a lot of people use a different way to enter or to buy or sell on their option contracts but the way I do it is just in my opinion much cleaner and I feel like I have more control of the price that I'm entering my option and without flipping back and forth between screens and screens so the normal way people would trade an option to buy or sell an option on thinkorswim is you go to the trade tab up top you'd hit trade you click whatever option contract you want to buy you click that now you're gonna adjust the quantity and you're gonna adjust the price right now it's gonna be confusing because you're not gonna know the price you're not gonna know the bid versus the ask right away unless you look at this contract and you can see the bid knee ask and you have it defaulted to look at that right so now you're gonna have to mess around with the limit price if you want to set a specific price or better that you're gonna get filled that if you're gonna do a market order then this really doesn't apply this is really for limit orders only because then you can finagle and try to get a best possible fill price not something too high to the ask if you're longing something and not something that you're not gonna be comfortable paying because with this method you're gonna have to confirm and send you're gonna have to go back to your charts and you're gonna have to look at all your charts then if you want to close out the position you're gonna have to go back here you know come here and sell your and close out your position the way I trade is that I go right into active trader now a lot of people don't understand what active trader is there's two different ways that you can use active trader the first way is on the side of the chart there's an active trader button right here you have trade time at sales then the third one is active trader when you hit that you're gonna get a screen that looks some like this I have time and sales and a level two up there but when you hit active trader you're gonna get a screen that looks like this now this is I have an option in here so this is not gonna look like this when you load it default for you guys but I have an apple 295 strike call into this loaded into active trader so if I want to buy and sell something all I have to do is put the limit price that I want to buy that and then my orders gonna go through autos on auto send automatically without and up coming through no confirmation screen without flipping back and forth between charts and the trade tab when you flip back and forth you're missing out on a couple seconds that you could be looking at something else or looking at processing other information so the way I like the treat is that I have everything on one screen and one screen only so on active trader I keep the time and sales because I want to see the prints coming through of those option contracts that I have selected and then I have the level two because I want to see the bid and ask right in front of me without flipping back and forth like I mentioned so I'm gonna go on demand and I'm gonna show you what active trader looks like in real life real time data now them as a time I'm recording this video the markets closed so you're not gonna see any quotes coming through but we're gonna go on demand so also really fast the way I have this set up now I can leave this set up if you guys want to drop like or post this in the comments I can put this set up in the description for you guys or I could just email it to you guys and that you got that way you guys can copy this workspace and have it for your own and apply it to your own thinkorswim just leave a comment if you if that's something you guys want and I have no problem sending you this workspace but before we go into any more detail I'm just gonna explain this workspace really fast now I have everything linked so I have apple on a one-minute chart up my top left I have apple on a 5-minute chart on my top bottom left and then I have apple without pre market data with a 15-minute time frame on my bottom now these three charts are linked and what links do and thinkorswim is that you can link charts so if I was to change the symbol all three charts would change because I have them all linked to symbol number one which is the red symbol now you have all different if one through nine I just use number one and whatever I changed number one still all those charts are going to change as well now on the Left I have the e-mini I have the espy future that way when I'm trading these stocks like I said I have everything visually on one screen I don't have to move my eyes between multiple monitors or I don't have to change tabs so I have the S&P I have whatever stock I'm looking at on three different time frames and then I also have an active trader setup with time and sales and level two for the option contract that I'm trading so we're on on-demand right now so we're back on December 23rd at 9:30 3:00 in the morning this is just a random time so for some reason I want to buy Apple calls right this happened in the past so I obviously knows what I know what happened this is how I also back test and test out different strategies but I want to hop in Apple calls right here for some reason I think they have good news and the sentiment is very bullish the market maybe I think is gonna be bullish whatever this is just all hypothetically speaking like we're actually actually trading live in the market at 9:33 so I want to purchase Apple calls what I would normally do is I'm gonna go to trade right I'm gonna go here I would normally go here adjust my quantity adjust my limit price because maybe the spreads are 20 cents or 30 cents and I don't want to pay a I don't want to lose on that slippage so in this case the sensor the spreads are 2 cents so it's not gonna hurt the market order but let's just say for instance the spreads are 20 30 cents and we want to set a price that we are comfortable paying at or greater than that right so what we normally do is I hit this go to confirm and send hit send right and now we're limit order sitting out there if we don't get filled and we're back at the charts we're gonna have to come back to trade cancel that order and redo it but the way I like trading and the way I use this active trader and this method is I take whatever option contract I want to trade I right-click it I go to copy now I copy this in my quote section and I hit enter so now I have my Apple 282 and a half strike call and the last price was 148 now maybe I want to trade further out of the money all I have to do is hit copy put Apple to whatever the strike is 287 and a half and I'll copy it into my quotes now notice my quotes are linked to symbol number nine so if we were to go back to our charts if I click on any of these options look what's gonna happen to this it's gonna change this now changed to Apple's 282 and a half strikes if I were to change this look what's gonna happen it's gonna go to the 287 and 1/2 strikes now everything changed including the data so also what is important here is when we are ready to make our trade when we're ready to long the option we're ready to buy it we have to make sure auto send is on now this is tricky because auto sent can be dangerous when you click auto send there's gonna be no confirmation what I mean by no confirmation is that you're not going to see a confirmation screen like this instead it's just gonna send that order and if it's gonna fill you it's gonna fill you right away without any confirmation or any notice I mean you're gonna see a notice you'll know when you get filled when your position is whatever amount of contracts you ordered and you'll see a alert come up on the top left of the screen but if we want no confirmation it makes your auto send is on and like I said that can be dangerous and then also you want to fix the quantity of contracts that you're gonna buy you're gonna buy 15 you're gonna buy 10 whatever it is you fix the quantity now you can minimize this and you could have the option ready to go so I'm gonna hit play I'm gonna go back to the 282 and a half calls and watch what I do here let me fix this price it's a little stretched out so now I see the prices down the middle the ask is that okay so this is a little weird because we're back on on demand and the data when you're on demand can be a little messed up for some reason I'm not sure why the bid is higher than you ask you know let's fast-forward maybe a mintue detail so when you're on demand the data sometimes gets a little skewed but when you're on real-time data it's gonna be normal it doesn't usually look like this so if we want to get filled at whatever price we're looking at all we have to do is put our buy limit order on whatever price were comfortable paying so in this case I'm gonna do 160 and look I get filled automatically so now I'm in 15 contracts as you can see by your net position right and you can see here on the active trader it says 160 and in that 160 we have those little arrows so I know I'm in 15 contracts by up here in that position at 160 now I would really wish the bid in the ask wasn't skewed like this so you can really see how it would look like with real time data but in this case let's fast forward 10 minutes and we're in 10 minutes let's say stock rallied almost a dollar I'm gonna look to sell my 15 contracts so I'm gonna get look at S&P see the S&P bouncing I got my 5 minute chart looks bullish my 15 minute chart looks bullish my 1-minute chart looks bullish but just for illustration purposes I'm gonna sell my 15 contracts so if we go all the way down on the active trader you'll see my price that I got filled that was 160 all the way down here right the time-it sales are coming in at 208 so I know the stocks around 208 really wish this ask wasn't skewed like this but for this purpose I know this option contracts are around 206 202 around that area so for the me to sell all I would have to do is go to the ask on the active trader and go to a price that I'm comfortable to sell between the bid and ask now all I have to do is hit that and now look my order is now at 15 at 203 as you can see it on the stock and then look you could also see it on the level - you can see it on the ask because I put my limit order to sell 15 contracts on the ask now if you wanted to cancel this all you have to do is click the X on the chart or the X on the active trader and then just fix your order to a certain price that you're gonna get filled that may be below the ask so I'm gonna put my 15 shares at 208 and boom I get filled right away because that's pretty much where the bid price is at and when I'm selling I'm gonna get filled up the bid is basically like a market order and that's how I use active trader I get the prints coming in I get the level 2 over here telling me the bid and the ask and if I want to get in and out it's a very fast quick you know seemingly seamlessly execution it was there was no delay I didn't have to go back and forth and it just in my opinion it's much cleaner and I've seen my order my entry prices at a much greater price than I normally would get at without using this method and what's going back and forth like this so I hope you guys enjoyed this video please drop a like comment please also subscribe to my channel I'm trying to grow this channel I'm trying to help out all of you guys because I have a lot of messages on my Instagram so if you want to follow me on Instagram I'll link that in the description and like I said if you guys want this workspace you can copy it and use this exactly just comment and I'll link it down below enjoy guys

Channel: Carmine Rosato

Views: 88,610

Rating: 4.9605913 out of 5

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Id: 6jjNGbmbqNo

Length: 12min 35sec (755 seconds)

Published: Tue Dec 31 2019