thinkorswim Options Trading

Updated Wednesday, July 27, 2011

Options Trading Grade: A

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Note: On June 11, 2009, thinkorswim was acquired by TD Ameritrade.  Because of this, as of July 27, 2011, all new accounts must be opened through TD Ameritrade.  Existing thinkorswim accounts will soon be transferred from clearing firm Penson Financial Services to TD Ameritrade Clearing, Inc.  Existing customers can still trade on the thinkorswim desktop platform for the time being but web and mobile trading must be done on TD Ameritrade platforms.  For the purposes of this site, please read our TD Ameritrade reviews as we will no longer be covering thinkorswim.


The thinkorswim options trading engine is excellent.  The trading interface, like the rest of the thinkorswim application, can be complicated so we recommend it for experienced traders who are technically savvy.  Entering new trades from options trading menu or closing out existing positions from the positions menu is well done.  Accessing option charts from the trading menus is only a click away. Canceling and modifying open positions is well done.  Trade confirmations include transaction time down to the second.  Option order types available are extensive, so those utilizing complex trading strategies will really appreciate the thinkorswim trading engine.

Option Order Types:


From within the thinkorswim desktop application, I selected the trade tab.  In the top text box I entered the underlying stock symbol I was interested in trading - GE (General Electric) - and pressed enter (click on images for larger views):

This generated a list of option expiration months.  I clicked on the arrow next to the December 2009 listing to expand that menu.  This brought up a limited selection of contracts listed by strike price, with calls on the left side and puts on the right side.  Before deciding which contract I wanted to buy, I decided to check a price chart for a specific contract.  To do this, I right clicked on the contract and selected TOS chart:

Going back to the trading tab, I decided to buy a put with a strike price of 16 so I clicked on the ask price in the appropriate row.  This populated the order entry menu at the bottom of the screen:

I modified the default field values to purchase 1 contract, set the limit price to $1.90 and selected to confirm and send my order.

This brought up an order confirmation dialogue box.  I selected to send the order:

This automatically displays the order book, showing the newly entered trade with a status of WORKING:

From the order book menu, orders can be canceled or replaced by new orders.  Either action instantly updates the order book menu.

I decided to let me trade go through,  When the market opened the following day, my trade was executed.  The newly created position immediately showed up in my position window.  I decided to close out my position so I clicked on the blue dot next to my position and selected to create a closing order:

This brought up the order entry menu with all of the fields auto populated.  This is a very slick interface.

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