Entering Options Trades Into ThinkOrSwim (multiple strategies)

Entering Options Trades Into ThinkOrSwim (multiple strategies)

Intro:
00:00 – What We’ll Cover In This Video
01:36 – Overview Of Option Expiration Dates

Long (Purchased) Options Strategies:
04:30 – Long Calls/Puts (Directional)
14:37 – Debit Spread (Directional)
22:44 – Long Butterfly (Directional)

Short (Sold) Options Strategies:
29:34 – Short Calls/Puts (Neutral / Directional)
34:45 – Credit Spread (Neutral / Directional)
40:15 – Iron Condor (Neutral)
43:03 – Iron Butterfly (Neutral)

Closing Orders:
46:07 – Automatic Closing Orders (When Percent Profit Target Is Reached)
55:44 – Manual Closing Orders (When Price Target Or Stop Loss Is Reached)

Diagonal Spreads:

Although Diagonal Spreads are not covered in this video, they are entered just like Credit Spreads EXCEPT your long option will expire at a later date. For example you may trade a Put Diagonal Spread with the SHORT put option expiring on June 21 and the LONG put option expiring on June 28. These are great alternatives for Credit Spreads if you can get a credit for them because you have the ability to earn MORE than the max credit on the trade.

In the screenshot below, you can see the max credit peaks at the short strike (in this case, at the 170 strike). However, with the differing expiration dates, the max profit peak will rise and lower as volatility changes. No worries though!… This max credit will never fall below the credit you received to enter the trade, which is where the P/L graph levels out (in this case, at about $110 credit.)