Think or Swim has become one of the most popular discount options brokerages in America. Melding state-of-the-art traders' software with an advanced browser-based brokerage interface, automated trading capabilities, low commissions and excellent execution, Think or Swim can help both novice and experienced traders take their game to the next level.
1. Become knowledgeable about options trading. No matter the capabilities of Think or Swim's software, low cost, or efficient execution, option trading is a very difficult, risky enterprise that most participants lose in. Become familiar with the game, carefully develop and hone the strategies you want to employ and test them out with paper trades long before committing any capital to them in live transactions.
2. Visit the Think or Swim Website to become familiar with the brokerage's commission rates, minimum account size and margin requirements. Depending on the strategies you employ, particularly if they involve selling options, you may be required to commit more capital and set more aside in margin than would a trader who's just going to be purchasing options.
3. Download and familiarize yourself with Think or Swim's brokerage and analytic software. Compare its technical analysis and option Greeks analytic tools to platforms offered by other brokerages like Tradestation or Interactive Brokers. Understand all the order buttons, like buy, sell, buy-to-open, sell-to-close and combination order keys like vertical spreads, horizontal spreads, condors, and butterflies. This way, when you're forced to make decisions live in the market, you won't waste valuable time or risk catastrophic error because you don't know which button to push.
4. Acquaint yourself with Think or Swim's browser-based brokerage interface. Many traders become comfortable with the software they download and prefer to always route their orders through it, but this might not always be possible. The brokerage platform may experience technical difficulties, or you may be out on the road with a computer different from the one on which you've downloaded your software. Consequently, it's imperative that you be able to place orders on Think or Swim's browser platform as quickly and efficiently as you can on the software.
5. Learn how to use Think or Swim's automated trading tools. If you've developed and tested a trading strategy that you're confident in, understand its pros and cons and set your allocation limits, there's nothing stopping you from letting the computer trade for you. The trading program will simply analyze conditions in the market you want to transact in and, if they are met, will open or close positions in your account.
Automated trading can be an excellent tool for working professionals who don't have time to sit in front of their computers and monitor their accounts all day. Of course, it's imperative that you keep up to date on the status of your account to make sure there have been no errors or drastic changes in position types or sizes.
1. Become knowledgeable about options trading. No matter the capabilities of Think or Swim's software, low cost, or efficient execution, option trading is a very difficult, risky enterprise that most participants lose in. Become familiar with the game, carefully develop and hone the strategies you want to employ and test them out with paper trades long before committing any capital to them in live transactions.
2. Visit the Think or Swim Website to become familiar with the brokerage's commission rates, minimum account size and margin requirements. Depending on the strategies you employ, particularly if they involve selling options, you may be required to commit more capital and set more aside in margin than would a trader who's just going to be purchasing options.
3. Download and familiarize yourself with Think or Swim's brokerage and analytic software. Compare its technical analysis and option Greeks analytic tools to platforms offered by other brokerages like Tradestation or Interactive Brokers. Understand all the order buttons, like buy, sell, buy-to-open, sell-to-close and combination order keys like vertical spreads, horizontal spreads, condors, and butterflies. This way, when you're forced to make decisions live in the market, you won't waste valuable time or risk catastrophic error because you don't know which button to push.
4. Acquaint yourself with Think or Swim's browser-based brokerage interface. Many traders become comfortable with the software they download and prefer to always route their orders through it, but this might not always be possible. The brokerage platform may experience technical difficulties, or you may be out on the road with a computer different from the one on which you've downloaded your software. Consequently, it's imperative that you be able to place orders on Think or Swim's browser platform as quickly and efficiently as you can on the software.
5. Learn how to use Think or Swim's automated trading tools. If you've developed and tested a trading strategy that you're confident in, understand its pros and cons and set your allocation limits, there's nothing stopping you from letting the computer trade for you. The trading program will simply analyze conditions in the market you want to transact in and, if they are met, will open or close positions in your account.
Automated trading can be an excellent tool for working professionals who don't have time to sit in front of their computers and monitor their accounts all day. Of course, it's imperative that you keep up to date on the status of your account to make sure there have been no errors or drastic changes in position types or sizes.
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