Using the TOS Analyze Tab to Make Better Trades

I WILL SHOW YOU HOW TO set up the Analyze Tab compare strategies to determine the best choice

First, Let's Pick a Stock

Then Define a Range

Pick a Direction & Target or a Range Some possible choices: Bull Flag breakout, target up to $355 area Pullback, then bounce off the $295 breakout Exhaustion gap, pullback to $280 area Pullback and stall with the overall market

Pullback, then bounce off the $295 breakout Wrong if drops below $290 Believe rally could slow down Target $335 (two thirds of bull flag target) Current price $315

Pick a Strategy Bullish Strategies: Buy Stock Buy Call Sell Put Buy Call Vertical Sell Put Vertical Buy Calendar Buy Call Diagonal

Which One is the Best Choice Let's use the TOS Analyze Tab to help us decide

How to Set Up the Analyze Tab This can be overwhelming until you gain experience Many of you already know how to use this tool To save time and favor the experienced members, I will jump right in to my method

Here are Some Fields I Use From left to right starting from the top of the Risk Profile tab: Symbol Plot Lines Price Slices Set Slices Reorder ALL Show/Hide Single/Beta Date (various symbol check boxes) symbol wrench icon

Analyze – Risk Profile tab

Analyze – Add Simulated Trades tab The top half resembles the Trade tab The trades you select remain in the Analyze tab You may add as many as wish There are tools to adjust each symbols price, implied volatility and more

Analyze – Add Simulated Trades tab

I've Added Some Trades

I Must Compare Apples with Apples In order to compare I need to use some equalization method I will use max risk I will now adjust the quantity of each strategy so each has about the same max risk Use any amount that works, even if very large For large lots, consider extra commission cost

Here Are the Adjusted Quantities

Let's look at each trade individually first Notice where the profit and loss appears on the Risk Graph (price) and on the Price Slices (date) Notice the Greeks (Delta, Gamma, Theta, Vega) We can analyze them with different dates We can also adjust implied volatility and more

+19 SHARES AAPL STOCK

+4 NOV 300 CALL

+2 JAN 290 CALL

+7 NOV 310/350 CALL VERTICAL

+6 JAN 310/350 CALL VERTICAL

-13 NOV 300/290 PUT VERTICAL

-6 NOV 300/280 PUT VERTICAL

+20 JAN/NOV 350 CALL CALENDAR

+17 JAN/NOV 340 CALL CALENDAR

+3 JAN/NOV 290/340 CALL DIAGONAL

+3 JAN/NOV 290/350 CALL DIAGONAL

To Compare the Risk Graphs Change the Plot Lines to Single Click on the dark box next to each trade you want to compare (max 8) Each risk graph will display above based on the date set on lower right

Here Are the First Seven Trades

Here Are the First Seven Graphs

Here Are the Next Four Trades

Here Are the Next Four Graphs

I've Narrowed It Down to Four I set the date for ten days before NOV expiration I prefer reward to risk greater than one to one I prefer positive theta I prefer a lower breakeven price

Here are the Four Trades

Here are the Four Graphs

Now It's Your Turn Try this on your own Choose your own criteria Make better, more informed choices Try different dates, some strategies perform better in a shorter time, some in a longer Adjust implied volatility relative to the IV history

Questions?

The End