Thinkorswim Spread Hacker - Credit Spread - Iron Condor

hello everyone and welcome back to the channel so today i thought i'll show you how to use the spread hacker and some of the capabilities that it has um so one of the really neat things about the spread hacker and i'm just going to jump right into this is the sprint hacker will actually allow you to scan within a scan which i think is pretty neat you can come in and you can look for spreads within say you know the s p 500 you can look for spreads within say the russell 1000 the russell 3000 you can look for spreads in a number of these etfs but i feel one of the better ways to use this is to actually create your own custom watch list and then you can actually scan that watch list in the stock hacker as well as you could actually just scan an etf in the stock hacker and save it so i think the best way to get the most use out of the scan is just to create a custom watch list that you'll use specifically for the scan of just a number of stocks that you'd like to trade and if you want to create a watch list if you've not done that before you can come down here and just choose watch list and then once you do that it'll say default click up here and go to create watch list you'll name your watch list whatever you want and then you will add the symbols here and whatever stocks you like to trade just add all those in and save it and that will be your watch list created so what i like to do i've already created a watch list here and i've named it spread and in this watch list i have just a lot of etfs etfs are very liquid and to get the most out of the spread hacker you really need to have very liquid products otherwise it's going to throw off this probability of profit and max profit what it's going to do it's going to find you a bunch of untradeable spreads and that's not really what we want so we want to create a watch list here and we can see i have the watch list labeled spread and if we come over here we can just spray a scan inside of that watch list now let me um discuss the settings that i have so a couple of things that i like to do um days to expiration max profit profit and probability of profit you can also do an optional one for the mark which is basically the mid price so if you want to collect say a minimum credit of say you know a dollar you could just add in um another spread filter for mark and you could do 1.0 and now it's only going to find spreads that are going to be at least a dollar so that's how you would do that but starting off here we want to do days to expiration first and what i like to do is i like to pin the monthly expiration or you can choose whatever desired expiration you want but the reason that i like the monthlies is because the monthlies are going to give us um the most liquid options to be traded so if we go down to the 67 days right here and then if we compare that to the 46 days we can see that volume today we're at 78 and 149 for this monthly expiration if we go to this one here that is just 46 days away we can see that we only have three and zero traded so we can see that this monthly just has a lot more trading going on so that does help and in a product like iwm it's not really going to matter as much because we still have a pretty pretty tight bid ask spread right here it's not too terribly bad we can see that this one is a little bit closer right here but when you get into some other stocks it's going to get very wide right here you know you could be one to two dollars wide on the bid ask spread and that's not going to do well for the spread hacker it's going to find basically just a lot of stuff that you can't trade so the next thing we want to look at is going to be the max profit and we can see that i have between 22 and 28 percent and the reason i have chosen that percentage is i've already went through and done the math and calculated the percent max profit to the strike width and if you do a 50 max profit that is one third of the strike width or 33 percent 35 percent is one-fourth and 25 percent is going to be roughly one-fifth of the strike with and so that's why i have we're right in between uh this 25 range so we're 22 and 28 and that's going to find us only spreads that are going to be roughly one-fifth of the strike width and you'll have to decide you know what how much risk you want to take here you know if you collect more premium that means that you're going to be closer to at the money if you collect less premium you're going to be farther out away from the money but you're not going to collect as much so that's something you'll have to decide so i've just kind of went right in the middle just for this um tutorial here and the next thing that we want to do is the probability of profit i like just to do max 80 um that gives us a pretty good range that seems to work well if you if you want to do a higher max profit i'd say closer to 50 cent 50 the one-third width right here you can actually lower this down to 70 percent if you want to but for now with these settings we'll leave it right here and we can see if we actually scroll if we sort by max profit so we can see um this is 25 max profit and this is actually an iron condor looks like it's a five dollar wide iron condor and we're collecting a dollar which is exactly twenty percent or one-fifth of the width of that trade and if you want to trade any of these all you have to do is just right-click and you can do um create duplicate order and then you just hit confirm and send and it'll send it right there so basically for that i've i've showed you how to create a watch list and scan inside that watch list but there's another thing you can do and i also feel that you should do this as well and that is creating a watch list and then going into the stock hacker and scanning inside of that watch list so what i've done here is i've already created a watch list and it says we are scanning in spread which is our spread watch list and what we've done is i have just added just a single study filter for a moving average scan and this is going to give us of all of these stocks and etfs the moving average has to be at least one percent above the 50 period simple moving average and if we hit scan it basically just finds these 10 stocks right here and what i've done is i've already went up here and saved it and i saved it as test once you have saved your scan we can go into the spread hacker again and now we can search for spreads under and i believe we named that test so we'll go to test so now we have basically a scan within a scan so now these are all the stocks that are going to be above the 50 period simple moving average and i'm not telling you to use um this as the stock hacker you know build whatever scan you want whatever you're looking for you can add that in here if if you only want stocks at the 52-week high or the 52-week low that's where you could build that right here and then you can scan those stocks for spreads and that's how you will use that so now just a couple of final thoughts um one flaw that the spread hacker has is think or swim has not added a number of stocks into this scan i can tell you with pretty much 100 certainty that amazon and gold are two stocks that i know of that will not show up in this scan and actually if we go back to um we want to search for spreads or scan in the spread watch list again and i'll show you this and now i'm going to remove all of these filters so basically this should give us scans for every single one of these stocks it should give us some form of a a spread type trade and i'm going to go ahead and just choose vertical right here as well with these settings that we used you don't even have to choose vertical or iron condor with the settings with the we have chosen it will automatically find credit spreads which will be vertical and iron condor trades but we'll just do vertical we'll hit scan and you will notice that is not going to show amd and amazon and you'll see amd and amazon are not shown it goes straight from arc to eem so we've basically went from here to here and you'll notice that gold is not going to be shown as well so we go straight from eem to iwm so we jumped over gold and this is something that i found a couple of weeks ago this is actually one of the reasons why i've taken so long to make this video i contacted thinkorswim i told them what was going on they were able to duplicate the problem they agreed it was a problem they forwarded the information to somebody to try to fix the problem and they've just yet to fix the problem so if you want to sell credit spreads on amazon and you want to use this tool to do it you can't do that but you can still go and manually just find credit spreads in amazon if that's something you want to do so anyway hopefully that helps you use the spread hacker hopefully it tells you just a couple of ways to use it it is pretty powerful but it i think it could be a lot better and then one final thing if you get the infinite loading screen you have to reset it i have to reset the spread hacker normally about once a day just because i will click scan and it will go into an infinite loading loop so you'll have to reset it so that's another problem it has but anyway hopefully this kind of shed some light on how to use this scan and maybe post up some of the settings that you use below anyway thanks for watching and have a great day bye

Channel: Options-Guru

Views: 222

Rating: 5 out of 5

Keywords: Credit spreads, Credit spreads for income, Iron condor, Robinhood, Spread hacker, call credit spreads, credit spreads explained, iron condor option strategy, iron condor strategy, iron condors for income, put credit spreads, robinhood investing, robinhood stocks, spread hacker criteria, stock market, thinkorswim, trading

Id: dfCxP269Hy0

Length: 11min 51sec (711 seconds)

Published: Mon Sep 13 2021