ThinkorSwim Tutorial - The Stock Hacker and the Options Scan Criteria

This tutorial explains how to use the Stock Hacker toolin the Think or Swim Trading Platform. By the end of this article, you will be able to scan Stocks and Options for potential trades and understand how to scan Implied Front and Back Volatility in order to compose complex Options Strategies. If you find this tutorial interesting read also:Think or Swim Tutorial - The CBOE Put/Call Ratio and the Index Watch.

The Stock Hacker is a ThinkorSwim scanning tool. You can use it to literally scan through over 25000 underlying. You can choose to scan every single Stock in the universe or make your scan better by selecting specific public Stock lists (S&P, NASDAQ, RUSSEL, etc) or personal Stock lists. Think or Swim does all this scan activity in real time for you.

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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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In ThinkorSwim, you can find the Stock Hacker tool in the Scan Tab on the top. Click on it and you will have three different sections: Stock Hacker, Spread Hacker and Spread Book.

First, go to the Stock Hacker section and choose a list to scan. Click on the “Scan in” or “Search” menu and look for specific categories depending on what you need to trade. Let us suppose you are interested in scanning the S&P500 Index. At this point, you have to select your scan criteria. You can simply do that by clicking on Add Fundamental Filter and set as many new scan criteria as you would like to utilize. You can choose from numerous criteria. Some are typically related to Stocks (e.g. Last, Net Change, % Change, Bid, Ask, Yield, PE and many more), others are specific for Options (Volatility Index, Front and Back Volatility, Volatility Difference and Put Call Ratio). The criteria you should select are the ones that suit your investing strategy the best. The Stock Hacker tool allows you to set up specific scan queries and save them if you are happy with your search.

Let me go a little more in detail about Options Criteria related to Volatility. You can scan:

• Volatility Index (Vol Index), if you are looking for a specific percentage of volatility.
• Front Volatility (Front Vol), it represents the front month volatility.
• Back Volatility (Back Vol), it represents the back month volatility.
• Volatility Difference (Vol Diff), it represents the difference between the front month volatility and the back month volatility.

If you are trading Options Strategies such as Calendar Spread, you may be well interested in looking for Options at 30 days from expiration with a high level of volatility to receive a higher credit when you sell it. In the same time, you may look for Options at 90 - 120 days from expiration with a low level of volatility to pay a lower debit when you buy it. The difference between high volatility of the Option you sell and low volatility of the Option you buy is called Volatility Skew.

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

In order to make sure you understand how to set your scan activity, I have prepared two useful examples on how to scan Stocks or Options related to a particular strategy.

Example 1 - Scan Stocks in the S&P500

First Criteria - If you are looking for a Stock traded for a price higher 20$, but not greater than 50$ you should select as criteria Last and simply type in the min field 20 and in the max 50.

Second Criteria - You may be interested in trading Stocks with high volume in order to have liquidity to support your trade and avoid to be stuck in your position. Then, you should select as second criteria Volume and type in the min field 1.000.000.

Third Criteria - You may even be interested in looking for Volatility. You should select as third criteria Vol Index and type in 80%.

With the three selected criteria you are looking for any underlying in the S&P500 traded between 20$ and 50$, whose Volume is over 1.000.000 shares a day and that has more than 80% Implied Volatility for its Options.

If you like this particular scan, you simply push on the Scan button on the right side of the screen. On the bottom of the page, the section Search Result will be immediately populated with your scan query. You can choose to save this Scan by clicking on the button on the top Save Scan Query, give it a name and any time you can call this query and use it over and over again.

You can run and save any kind of search you like. When you finish your scan activity, you can just click on the Reset button on the top right of the screen to come back to the default screen.

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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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Example 2 - Scan Options Calendar Spread in the S&P500

A Calendar Spread is an Option Strategy formed by buying and selling two Options of the same type (Call or Put) with the same strike price (ATM) and different expiration date. Your goal is to benefit from the Volatility Skew (difference between the volatility of the Option you sell and the one you buy).

First Criteria - Once again, you are interested in trading Stocks with high volume in order to have liquidity to support your Options strategy. You should select as first criteria Volume and type in the min field 1.000.000.

Second Criteria - You are interested in selling a front Option (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.

Third Criteria - You are interested in buying a back Option (with expiration date at roughly 90 -120 days) with low volatility. You should set the back vol at max 30%, because you are buying and you want to keep the debit low.

With the three selected criteria, you are looking for any underlying in the S&P500 with volume over 1.000.000 shares a day and whose Options present an Implied Volatility Skew.

Following these example, the same kind of research can be done for any Options Strategy. The important is to set the scan criteria correctly and you will get all the potential trades were looking for.

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

In the next GroWithYou Trading Tutorial:

• The Index Watch in ThinkorSwim
• The Put/Call Ratio indicator

Keep learning about ThinkorSwim and Stock Options by going to:Think or Swim Tutorial - The CBOE Put/Call Ratio and the Index Watch.

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