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ThinkorSwim (TOS) Analyze Tab Tutorial – How to Use it To Analyze Option Trades

Today I want to share with you how in the world to use the ThinkorSwim analyze tab or any analyze tab because the brokerage software is very similar on just about any platform that you’re working with. 

Let me share with you how to use this analyze tab because most people just don’t get it.

Using Analyze Tab

It’s important you first understand what in the world is happening in the analyze tab.

To do that we’re going to go on paper. You have to look at it from a basic kindergarten point of view. 

What is happening here?

Well, this tells you how much you’re making or losing in terms of money?

Here at the bottom, we have the price of the stock. And on the left or right is your profit. That’s the way this works. If I pick any point right here, what does this mean?

It means if that stock were $200, I would be profitable $1,200.

Let’s pick another point. What does that point tell me?

Well, if the stock price were $135, I would be at a loss of $800. The zero line is right here.

Let’s connect these two points. I can make a straight line. What does this tell me? It tells me that this is the angle or steepness of my shares.

It tells me how fast I’m making or losing money. And the higher your Delta, the steeper that curve will be. Sometimes you’ll have very steep angles. Other times you’ll have less steep angles.

If I break this down, you have a handful of different things. Let’s look at a couple of different viewpoints. Here we have a stock that’s moving to the upside.

What does that mean?

That means that I’m making money as the stock price goes up.

Here we have a stock that’s moving a lot slower. 

We still make money as the stock moves up. We lose money as the stock goes down.

What if we do something different like this?

In this case, I make money as the stock price goes down. This is shorting. 

That from the top is when you’re long and when you’re buying shares.

And that is because as the price of the stock goes down, my profit here continues to increase.

The positive end you can see in the picture.

We make money here at the top, and we lose money as it goes down. Here we lose and up here we make money.

If we did like a small angle means I just have less shares.

When we look at the analyze tab, that’s ultimately what it’s telling us. And we’re going to go on screen.

Take a look at ThinkorSwim platform

Here I have my ThinkorSwim platform. If I go to the monitor tab, there’s the monitor area. If I go to analyze, there’s the analyze tab.

Now I can pick a stock. I’ll go to the trade area. I pick Amazon. Let’s buy some shares. Analyze that trade, and if I evaluate this stock, you can see I have 500 shares.

Here is my evaluation. My profit is over here. Here’s my zero line and here’s my current stock price.

These lines right here are just lines that are connected to these price slices over here.

I could remove them so that way they’re not confusing. Or, of course, you could add some in depending on if the stock reaches that price, that’s what it’s going to tell you that’s how much you make or lose.

Here’s my current price. Here’s the stock angle.

I can change it to:

  • float or 
  • fixed 

If it’s fixed, I can stretch it one way or the other. I could also stretch this as well, depending on how I like to look at the curve or a graph. I want to increase the amount of shares.

You can see here it’s 500 and goes to 600-700 and so on. You’ll see that angle continues to rotate, which means I’m getting more shares. But the steepness continues to go. And how far can it go?

Well, unlimited because remember profits on the left, and losses on the left can be unlimited. This thing can go pretty much out of straight-line.

If I go, let’s say 600,000 shares; it’s almost a straight line. But remember I could stretch it and now that angle will change.

If you don’t like dealing with those angles, you could change it to a float. And it’ll give you a rough normal angle depending on as you change your number of shares.

That’s how you use it. That’s the baseline. Here is our Delta, an that’s beyond the scope of this video. But it tells you that amount of money that you make for every $1 move in the stock.

As I have this bid-ask spread, you can see it’s down $85. Well, what happens if the stock price goes up to $1.

I make $60 because I have 60 shares. And you can see that profit and loss now would be negative 25. If I go up another $1 add 60 to that, and now I’m up 85. That’s how that works.

You also have a time thing here, but it’s not going to affect it in stock. That’s more for options, so if I start adding in options, this is where the fun begins.

What about when it comes to Options?

When it comes to options, there’s a lot of exciting things that can happen. That’s because you could draw diagrams like this, which means in this zone over here you’re profitable. In the other zone, you’re not profitable.

Anything over here, if the stock price lands there, you’re not profitable.

It’s important you recognize how these pictures are created. And they’re created by a combination of spreads or options contracts that you put on or place.

Depending on where the price lands, if it’s here, you might be profitable as long as you have time expiration.

If it’s down here, you’ll be over in this area; then, it’ll be unprofitable.

That’s because here is your line.

And the same thing goes with different spreads like this. Well, if you’re in the 240 zone, you’ll be right here. Pretend all these are little dots.

I’ve got little dots. That’s all it’s telling you is that this is the dotted line you’re going with, and this is your profitability.

If the stock is at 230, your dot is going to be right there. That’s what these are doing for you. And you have things that are iron condors – same exact thing.

You have all these different little dots, but it’s creating an iron condor. And all these infinite points. If the stock is 120, you’ll be down 800. If a stock is 130, you’ll still be down 800. That’s where these drawings come in.

Now, let’s get back on the screen. I buy a single vertical, and now we have a vertical right here. I’ll change it to float. And then back to fixed. That way, I can manipulate it. You can see I have two lines.

What are the two lines really mean?

Well, this line right here is the line for today. This line is at expiration.

You can see those based on the dates in this box over here. And as I move the line or my mouse, you can see that changing as well.

Here I’m changing this area, and you can see that being a little bit adjusted. 

When you look at this, you also have: 

  • Delta 
  • Gamma 
  • Theta and 
  • Vega 

When you’re dealing with just the stock, you don’t have that. This means that with time if you go over here to the time area and you start moving the time, you can see your profit and loss will change as well.

That means that with a time that gets closer and closer to your green line. And eventually, it expires, and that’s what happens. This is the way it works. Now there are different ways to do the setup here.

I could change it to the expiration one. I could do something interesting here. Let’s just say they step 4. And what this does is it just breaks it apart into a couple of different days.

You can see here at this date and time; you can see what it’s done. Put a whole ton of dates here.

And with these dates depending on where I land, that’s going to be my profit and loss. I could move my mouse, and you can see it because it’s taking into account those kinds of expirations.

That’s because, on that date, that’s how that line is going to look at that time. Right now, it just depends on the price. And as I move it on the price, you can see those factors shifting as well.

There you can see all of them zoomed in.

Anyways, this is how that works when you do day step.

I personally just have it simple like this.

How to Add Price Slices?

There’s a cool little feature here. If you want to put in these price slices, I could add one.

I could change it to a percent. I could change it to a lot of other factors. But here let’s just change it to a percent. And I could change it to plus 5%. And I could add another slice. I could say what if we go down 5%. Or you could just change it to more like dollars if you’re just thinking about the stock price.

Well, let’s say it goes up to $10 and down $10. And what it’s done in this stock it’s not that much of a movement because we’re dealing with Amazon. It’s a $1,800 stock almost. It’s not as big of an issue.

But we went up a hundred points or down a hundred points. Now what it tells me are these profits and losses. I’ve had these lines that are yellow, as you can see.

And there’s the tick right there. There’s the tick the current tick, and there’s our break-even at the zero line tick.

That right there is what you’re watching. But these are all tied and connected to these lines.

This one is connected to this line. This one plus 100 is connected to that line. And this one is to this line.

Ultimately, what it’s doing is then reflecting the profit and loss based on that. Right here in this area of the profit and loss depending on where it was.

If it were down $100, I’d be down about $110. That’s what it’s doing. You could rearrange those. You could even type in an exact number. But anyway, that’s how that works.

And there’s one other interesting thing with this analyze tab that I want to share with you.

That is this gear icon, and it’s hard to see. But if you pop this out, you can also adjust the volatility. If I adjust the volatility 15 points, you can see what’s going to happen in this graph – it adjusts.

You have to take volatility into account if you’re trading options. But this is how this analyze tab works. And when you’re working within this, whether you’re doing these verticals, a calendar it’s no different. 

If the price was 1800 and the time and date and the volatility were this, then what would be my profit?

Let’s say a few days forward. If we held it and didn’t move, I’d be up about $145 if we held that price. But if we move down to let’s say 1700, I’d probably be a break-even. If we moved up to 1838, I’d be a break-even.

The thing is that I have to stay in that range. This is the whole point. It tells you your profit and losses based on the numbers and the figures.

That’s what the analyze tab is all about. And if you add more contracts, it tells you how your risk would be affected.

That’s ultimately the way that you could use it. 

You could also:

  • filter some things 
  • hide positions 
  • hide simulations 
  • show all 
  • hide different types of dates 
  • hide the single symbol 
  • look at everything you have 

Those are a couple of other things, but that is the simplistic view of it. And hopefully, it gave you some insights.

Of course, you could change the color if you don’t like those colors or if it’s tough for you to see.

That’s the basics behind these analyze tabs. There are a few other little tricks. But 90% of the people this is all you need to know.

There’s also set slices to let’s say 11 rows if you want to set them. There are different ways to do that. There’s like a little bit of default things in these areas as well.

Final Word

That’s how you use it, and that’s the whole point behind it.

I hope this was helpful. Here’re the things to think about when it comes to the ThinkorSwim platform and the analyze platform.

If you struggled with it, then go to the website TradersFly.com, and you can hook up with a coaching session. We can work with you one-on-one.

That way, you know what’s going on what’s happening, and I can lead you. That’s the whole point of coaching sessions. We get to work one-on-one and making sure you understand the platform and how it works.

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