Master The Options Chain In Think or Swim | Trading Tutorials

Top of Book Quotes / Information

To hide and show different drop downs in the ThinkOrSwim trade tab, click on the gear icon under the OnDemand feature. From here you can toggle on or off different tabs. By clicking and dragging you can also re-order them. Top of book information is available next to the ticker search bar. At a glance, you can see the ticker, company name or description, last trade price (regular trading hours), net change (percentage and dollar amount), bid and ask price (includes the after hours session), the exchange that the symbol trades on, the availability of shares to short, and if its eligible for 24/5 trading. Next is the trade grid where you can integrate chart windows into the trade tab where the options chain exists. Treat these as you would any other chart window. It can be useful to link them to a master symbol, or keep them different if you are looking for different news flows, ie SPY side by side with QQQ and IWM news flows.

Understanding the Options Chain

Most utility comes from the options chain tab. When dropping it down, multiple series are revealed. A series is a set of options with the same expiration date and the terms can be used interchangeably. The date format will always be as follows: Day, Month, Year. Days until expiration are in parenthesis and after that the contract multiplier and a type designation. On the other side, implied volatility percentage, and the expected move for that expiration are listed.

In each series, calls are on the left and puts on the right, the strikes are listed vertically and you can choose how many you want to display via the dropdown. Filters are available to look for specific sides, expirations, strikes, and even the exchange on which the options are being traded. Spread type is customizable via drop down. The default is single, buying one option, selling one option. To build out verticals, change the spread type OR preferably use keyboard shortcuts to create a multi-legged spread. More control is achieved by building spreads manually.

Information layout is also customizable. The bid and ask are constant, but you can elect custom layouts that show different information pertinent to your strategy. For example, the extrinsic vs the intrinsic value of the option, the theoretical value of the option in the future based on a condition change in underlying instrument. Layouts can be saved and reused in the future without having to rebuild them.

Options Statistics

Todays options statistics displays information about contract volume on the bid vs ask, and calls vs puts. This provides an indication of retail activity or if the action is dominated by market makers trading in between the spread. The sizzle index shows the relationship of the current days volume against a 5 day rolling average of total option volume.

Options time and sales will take lots of memory from your CPU system. It enables you to watch options order flow and see where the largest orders are being placed. The top rows show the largest single option trades on both the call and put side for the day. Filters are available here to navigate to specific series, strikes, or position sizes.

The product depth tab plots curves of options statistics vs price. It can be used to identify options that have the highest open interest, what the delta curves look like, and much more.