Bull Call Spread. This training guide shows you How to use Thinkorswim to :

Transcription

1 Bull Call Spread This training guide shows you How to use Thinkorswim to : Enter a Bull Call Spread with : 1) Profit Taking set near the maximum spread profit. 2) Stop Loss set based on Technical Exit or Stock Price. Disclaimer: Take note that the entry and exit prices here serves as example only and not exact live trading entries.

2 Make sure you practice with papermoney

3 Select the Trade tab & Click All Products

4 Assume you spotted a Long Opportunity for SPY and assume Technical Support is $136 Current SPY Price is $ Support = $136 SELL $137 Call BUY $136 Call You would cut loss if SPY go below Support So, you Set Stop Loss at $135.45

5 Enter the Stock symbol ( SPY in this example)

6 You may Click the Down/Right Arrow next to UNDERLYING or OPTIONS to hide/unhide the details of Stock or Options

7 Click on Right Arrow of Dec 2012 Expiration to see the next level detail of Options

8 You may change the # next to Strikes to list down the # of Strike Prices you wanted to see 10 Strike Prices

9 Next level details of Dec 12 Expiration Options Smart Options Call Options Put Options 35 days left from expiration

10 Select the Call Strike Price AT/Near the Support ($136 Strike Price in this case)

11 Right click on the bid or ask of the $136 Strike Call > Select BUY > Select Vertical

12 The ORDER ENTRY Window will show the $136 Strike Call Buy Vertical you have just entered This is a Bull Call Spread Buy $136 Call & Sell $137 Call This is $1 Spread

13 You may change the $137 Strike Price to $138 Strike Price to make it a $2 Spread Change the SELL leg to $138 Now this is a $2 Spread BUY $136 Call and SELL $138 Call

14 Check to confirm IF this is indeed a LIMIT Order and DEBIT Spread LIMIT Order DEBIT Spread

15 Edit the # of Contract directly (or use the up/down arrow to adjust accordingly) e.g. change from 2 to 5

16 Click the Lock to lock our Entry Price

17 Edit the Entry Price to $0.50 (Change from $0.58 to $0.50 in this case)

18 Change the Day Order to Good Till Cancel Order

19 Zoom In : Before vs. After (Price Unlock to Lock & Day to GTC) Before Current Market Price After

20 Right Click on Advanced Order Select the 1st trgs OCO

21 Single Order Changed to 1st trgs OCO

22 Right click on the VERTICAL (Light Green Background) & Select Create Opposite Order

23 1st Opposite Order created (For Profit Taking Setting-Pink Background)

24 Right click on the VERTICAL (Light Green Background) again & Select Create Opposite Order

25 2nd Opposite Order created (For Stop Loss Conditions Setting - Pink Background)

26 1st Opposite Order is used to set the Profit Taking Target & 2nd Opposite Order is used to set the Stop Loss Conditions This 1 st Opposite Order is for Profit Taking Setting This 2 nd Opposite Order is for Stop Loss Conditions Setting

27 1st Opposite Order Changed from $0.50 to $0.94 (This setting is for Profit Taking)

28 Now Click the Gear icon next to the 2nd Opposite Order to set the condition to CUT LOSS

29 The Order Rules Window shall pop out when you click the Gear icon

30 Select MARKET for Price Rules

31 Price Rules = MARKET

32 Click on Symbol (Enter SPY in this case)

33 Select MARK for Method

34 Select BELOW for Trigger

35 Edit the Threshold for Stop Loss (This is the Stock Price that will trigger CUT LOSS at Market Price) We will cut loss if SPY go below

36 Click OK to close the Order Rules Window

37 Click the Confirm and Send

38 Click SEND in Order Confirmation Dialog (Verify the prices and conditions before clicking, Max Loss must be limited)

39 You order has been submitted

40 Click on the Monitor tab

41 Your order is now in the Working Order