Helping you find your way
from TD Ameritrade
Page (Part 2)
Don't be a guesser. Put probabil-
ity on your side before you place
your next trade.
• In the last issue of thinkMoney, we chatted
about how to put together a picture of your
trade with the Risk Profile feature in the
Analyze page. Taking it one step further with
the Probability Analysis feature, you can
assess the odds that the trade in your pretty
picture might actually work. In other words,
your due diligence should include looking at
potential price risk as well as probabilities.
If that sounds like a lot, let’s break it down.
THE CHART AREA Want to know the theoretical range your stock could trade in at the
next option expiration? Whatever probability
you desire, type in the symbol of your favorite
stock or index in the upper left, and the price
range it will likely trade at some future point is
displayed, including multiple options expirations (designated by the red vertical dashed
lines). The elliptical yellow line you see graphically connects each day’s hypothetical range in
PROBABILITIES BY THE NUMBERS If
pictures confuse you, maybe you just want the
hypothetical price range for your chosen probability number at each future options expiration.
POSITIONS AND SIMULATED TRADES
If you’re analyzing a position, this is where the
details of each leg of the trade (or trades) live. If
after analyzing the probability a stock will trade
in a certain range, you want to adjust the position you’re analyzing, you can conveniently do
• This is not a trade recommendation and is for illustrative purposes only.
5 Steps to Analyzing The Odds
1/Enter a symbol
This is filled in automatically if you’ve come to this page with
a pre-populated trade. However, if you’re just starting out,
enter the symbol of the stock or index you want to analyze
here and hit Enter on your keyboard. The numbers before you
will change for each stock or index you enter.
2/Add simulated trade
If you haven’t done so already, click this button in the top
nav bar of the Analyze tab to create a new position. Enter
the symbol in the fill-in box and right-click on any strike in
the option chain. Choose the strategy to populate a trade in
the Positions and Simulated Trades section and click the
Probability Analysis button at the top of the page to get
back to the screen shown above.