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Tip 8 - Other Stock Option Resources

thinkorswim

thinkorswim by TD Ameritrade

thinkorswim by TD Ameritrade (thinkorswim) - Online broker specializing in stock options – Excellent software-based Options platform. Our choice as the absolute best broker for option trading.
Chicago, IL (866) 839-1100 www.thinkorswim.com

This Chicago brokerage firm with the unlikely name thinkorswim, Inc. by TD Ameritrade is our clear choice as the best of all option-friendly brokers. For openers, they have absolutely the best software. For several years, I paid over $250 a month for a service delivering real-time complete (bid-asked prices, sizes, volume, Greeks, etc.) options chain screens – it comes free at thinkorswim by TD Ameritrade, along with dozens of other software programs for the serious option trader. Even more important, our experience has shown that thinkorswim by TD Ameritrade achieves consistently better spread executions than any other broker we could find – these could save an active trader thousands of dollars each year. You may select any of several commission schedules which are equal to (or lower) than the rates charged at OptionsXpress (and other discount option brokers). But perhaps the biggest reason of all to choose thinkorswim by TD Ameritrade is their superior level of personal service – you can always talk to a real person, and there is no extra charge for orders placed on the phone. I believe that there is no good reason to choose any other broker for option trading than thinkorswim by TD Ameritrade. I am not the only person who feels this way - Barron's* ranked thinkorswim by TD Ameritrade as the #1 web-based online broker in 2006 and 2007.

*thinkorswim by TD Ameritrade firm was evaluated versus others in eight total categories including investment types that can be traded, the quality of screeners provided to sort through stocks, options, or funds, the consumer-friendliness of trading screens, overall ease-of-use and ability to be customized. thinkorswim topped the list with the highest weighted average score.

thinkorswim Disclaimer:  thinkorswim, Division of TD AMERITRADE, Inc. and Terry's Tips, Inc. are separate, unaffiliated companies and are not responsible for each other's services and products.

 


Options Graphing Software

Terrys Tips Stock Options and Trading Report

There are many options graphing software packages out there, most of which do far more than the average investor would ever need. Of course, they cost too much as well. I have found one package that I absolutely love. It does everything I want (and lots more), and is very inexpensive. Most of all, it's easy to use. What I like best about it is that once you enter your positions, you click an update button, and the current market prices are looked up for you, and the graph updated.

Each week, for each of our portfolios, I create a Risk Profile Graph like this:

risk profile terrystips.com

(Note:  This graph was created on July 25, 2009 when the Boomer’s Revenge portfolio was worth about $9,500 and the stock, SPY, was trading at $99.)

This graph lets me know what profit or loss will result from my current positions at the next expiration at each stock price. I can see that the portfolio will make about a 15% profit in a single month if the stock lands anywhere between $100 and $104 in four weeks and there will be a gain at any SPY price between $94 and $108, a range of 14 points. The graph gives me a visual reading on my risk at different stock price scenarios, and helps me decide if I should make an adjustment. Of course, I can enter the several different possible adjustments and examine the graph with those new positions before I make the actual trades.

You can purchase the Excel Option Calculator software here. It was written by a smart young man who lives in Argentina. The price is only $57.90. If you enter the Discount Code TT36, he will take off $5.00 for people who found this software through Terry’s Tips .  With this code, your net cost will be only $52.90.  I recommend it highly, and use it every day myself.


Traders Accounting

Highly recommended tax experts specializing in online trading – well versed in options

Bellevue, Washington
(800) 938-9513
Click here for Traders Accounting (Discounts for Terry's Tips Customers)

Traders Accounting comes highly recommended from many folks, including Terry’s Tips subscribers. They provide tax consulting, entity formation and 401(k) services that help you efficiently establish and maintain your trading business. Terry’s Tips customers receive $75.00 off their Tax Secrets for Traders: Home Study Course as well as discounts on other services.


Making 36% – A Duffer's Guide to Breaking Par in the Market Every Year in Good Years and Bad

Making 36%: Duffer's Guide to Breaking Par in the Market Every Year in Good Years and Bad

Here is what the book looks like (but the good stuff is inside):

The book was originally published at $19.95. You will receive an electronic version so you can start right away, and the paperback version will be mailed to you free of shipping and handling charges. Order it today at www.Making36Percent.com (Enter the discount code TEE and your cost will be only $12.94, including shipping by First Class mail).

This could be the best investment decision you ever make. At least, you won't be risking much to learn the strategy. And it could change your investment outlook for a lifetime. Total cost, including shipping only $12.94 - www.Making36Percent.com (Enter the discount code TEE).


CBOE – Chicago Board Options Exchange

Best of all educational resources for stock options

Complete education program, list of option symbols, LEAPS, volatilities, Black-Scholes calculation module, everything you could ever need for learning about stock options. Create your own home page. Everything's free! http://www.cboe.com/Home/

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Terry's Tips Stock Options Trading Blog

September 21, 2016

Calendar Spreads Tweak #4

Today I would like to discuss how you can use calendar spreads for a short-term strategy based around the date when a stock goes ex-dividend. I will tell you exactly how I used this strategy a week ago when SPY paid its quarterly dividend.

Terry

Calendar Spreads Tweak #4

Four times a year, SPY pays a dividend to owners of record on the third Friday of March, June, September, and December. The current dividend is about $1.09. Each of these events presents a unique opportunity to make some money by buying calendar spreads using puts to take advantage of the huge time premium in the puts in the days leading up to the dividend day.

Since the stock goes down by the amount of the dividend on the ex-dividend day, the option market prices the amount of the dividend into the option prices. Check out the situation for SPY on Wednesday, September 14, 2016, two days before an expected $1.09 dividend would be payable. At the time of these prices, SPY was trading just about $213.70.

September 7, 2016

Calendar Spreads Tweak #2

This week we will continue our discussion of a popular option spread – the calendar spread which is also called a time spread or horizontal spread. We will compare the expected costs and potential returns if you select different time periods for the long and short sides of the calendar spread.

Terry

Calendar Spreads Tweak #2

First, let’s look at a typical calendar spread on Facebook (FB). Today, the stock is trading just over $130, and you might buy an at-the-money calendar spread by placing this order:

Buy To Open 1 FB 16Dec16 130 call (FB161216C130)
Sell To Open 1 FB 14Oct16 130 call (FB161014C130) for a debit of $3.75 (buying a calendar)

This spread would cost about $3.75 ($375) to buy, plus $2.50 in commissions at the rate Terry’s Tips’ subscribers pay at thinkorswim, for

September 1, 2016

Calendar Spreads Tweak #1

This week we will continue our discussion of a popular option spread – the calendar spread which is also called a time spread or horizontal spread. We will check out the feasibility of buying spreads at different strike prices in an effort to reduce risk.

Terry

Calendar Spreads Tweak #1: First, let’s look at a typical calendar spread on Facebook (FB). Last Friday, when FB was trading about $124.20, we bought 5-month-out 20Jan17 calls and sold one-month-out 30Sep16 calls. The spread would cost $5.43 ($543), and this is what the risk profile graph looked like:

Making 36%

Making 36% – A Duffer's Guide to Breaking Par in the Market Every Year in Good Years and Bad

This book may not improve your golf game, but it might change your financial situation so that you will have more time for the greens and fairways (and sometimes the woods).

Learn why Dr. Allen believes that the 10K Strategy is less risky than owning stocks or mutual funds, and why it is especially appropriate for your IRA.

Order Now

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