Bull Put Spread - Stock Hacker and Spread Hacker in ThinkorSwim and the Manual Scan Activity

This tutorial explains how to perform the scan activity in order to find the best Vertical Bull Put Spread to trade. By the end of this article, you will be able to use informatics scan tools such as the Stock Hacker and the Spread Hacker and perform a proper manual scan activity. If you find this tutorial interesting read also: How to trade a Bull Put Spread - Technical Analysis and Manual Scan Activity.

How to place the most rewarding options strategies from scratch? Visit my website at www.FromZeroToOptions.com to get tutorials, instructions, articles and much more stocks and options related.

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To find a profitable Bull Put Spread, you have two main options:

1. Use a series of scan tools that some brokerage firms offer to you;
2. Manually scan stocks in Public Lists such as the Dow Jones Index and the SP500.

Scan Tools in ThinkorSwim

About the first option, the ThinkorSwim Trading Platform provides you with two powerful tools in the Scan tab of its desktop software: the Stock Hacker and the Spread Hacker. You can use these two sections to literally scan thousands of stocks or options spreads in a few seconds.

For further information about these scan tools visit the following tutorials: The Stock Hacker and the Options Scan Criteria and The Spread Hacker and Scan Criteria for Options Strategies.

To find a Bull Put Spread in ThinkorSwim, choose a Public List (e.g. SP500) and set the Stock Hacker as follows:

First Criteria - Volume

You are interested in trading Stocks with high volume in order to have liquidity to support your strategy. Type in the min field 1.000.000.

Second Criteria - Front Vol

You are interested in selling options (with expiration date at roughly 30 days) with high volatility. You should set the front vol at min 30%, because you are selling and you want to receive a huge credit.

For any position detected from the computer, remember to check that the option purchased must have lower volatility than the one sold.

Free Tutorials - Stocks, Options and ThinkorSwim. Click Here.

To find a Bull Put Spread in ThinkorSwim, choose a Public List (e.g. SP500) and set the Spread Hacker as follows:

On the top, click on the menu Search and select “Vertical”.

First Criteria – Days to expiration

You are interested in trading options that are about to expire within 30 days or less in order to benefit from the effect of time decay. Type in the min field 15 and in the max field 30.

Second Criteria - Front Vol

You are interested in selling a options (with expiration date at roughly 30 days) with high volatility. You should set the front vol at min 30%, because you are selling and you want to receive a huge credit.

For any position detected from the computer, remember to check that the option purchased must have lower volatility than the one sold.

Then you can set some optional criteria to make your search suits your trading plan.

Third Criteria - Underlying Price

You may feel more comfortable either trading stocks with high or low price levels. For instance, if you prefer high priced underlying, type in the min field 40 and in the max field 100.

Fourth Criteria - PL/Margin

According to the cash available in your account and your money management, you may prefer placing a trade whose margin is within a certain amount. For instance, if the maximum margin you can afford for trade is $2000, type in the max field 2000.

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Do not forget to visit my website at www.FromZeroToOptions.com to get tutorials, instructions, articles and much more stocks and options related.

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Instead of using scanning tools, you can also perform the scan activity manually. Actually, this is the option I prefer, even though, at the beginning it can take a long time and a great deal of patience. The reason why I usually perform a scan activity manually is because it allows you to have an overall picture of the Financial Market. In fact, it is carried out by checking patiently each and every stock contained in the major Public Lists and, as a result, it dramatically helps you to build knowledge of the market.

When I do this activity, I usually look for stocks with major or secondary points of support. Once detected one of these points, even if the stock is being traded far from my target price, I set an alarm on the trading platform in correspondence of that support. Doing so, the computer will advise me when the stock is at or below my target price in any moment in the future.

If this activity is properly performed when you scan stocks for the first time, you can arrive at a point in which will be the broker to advise you when stocks are being traded at your target price. At this stage, it will not be any more required much more effort from your part. Naturally, this activity involves knowledge of basic technical analysis skills. For further information on how to read charts and basic technical indicators see the tutorials: Chart, Studies, and Styles.

Free Tutorials - Stocks, Options and ThinkorSwim. Click Here.

In the next GroWithYou Trading Tutorial:

• Road map to perform a Manual Scan Activity;
• Factors to analyze before trading a Bull Put Spread;
• Market Overview and News;
• Earnings Reports, Strike Prices and Expiration Dates.

Keep learning about Options Strategies and ThinkorSwim by going to: How to trade a Bull Put Spread - Technical Analysis and Manual Scan Activity.

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