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TDA's Spread Hacker. Useful?

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I am wondering if anyone ever used or still uses the spread hacker in Thinkorswim. When they say this particular vertical spread or calendar has 70% chance of winning for example, how accurate is that and can I trust it?

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    • By Ringandpinion
      I wanted to start a new topic on recent problems with major retail brokers.  With the recent dropping of commissions and subsequent massive influx of new retail traders (for many reasons), the major retail brokers have all run into slow downs, outages, backlogs and other failures.  I've been aware for sometime that my fills on both TOS and IB have had intermittent problems.  The recent thinkorswim outage was a real pain to me and I didn't get hurt by it, just massively inconvenienced, no doubt others were hit in the pocket book.  I'm a big fan of TOS, mainly because I've been on their system for a long time, their rates aren't the greatest but they don't have any other fees.  The problem I see is that there is no end in sight for these brokers to be overloaded.  Little or no commissions, zero or very little account size, and massive new resources needed on their part to solve the problem.
       
      I don't have a problem with a minimum account size and I would even be willing to pay a little more in fees or even a monthly tithe for a platform to get better fills and steadier service.  I'm starting the broker search now, I'm not looking forward to any of this, I was happy with what I had but I don't think I have that any more.  I'll post my efforts here if anybody is interested and would appreciate feedback from others as well.
    • By Azov
      Just wondering if anyone has ever had success negotiating with TOS to reduce/remove the $19.95 fee that TOS charges for assignment and exercise. If so, what kind of arguments worked best?
       
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      Any input is greatly appreciated!
       
    • By Kim
      The impact of commissions on your results can be astonishing.
       
      This excellent article by Business Insider is asking the right questions (and also answering some of them):
       
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      Their conclusions:
      At least 17 million investors overpaying for online brokerage Only 12% of commission fee is used for trade execution at top brokerages Over $1.8 billion per year wasted on unused premium services Lets analyze one specific month, January 2015, and see how different commissions structure can impact the returns of our SteadyOptions model portfolio.
       
      SteadyOptions $10k model portfolio traded 228 contracts in January. If you paid $0.75/contract with no ticket fee, you spent $171 on commissions, which is 1.7% of your portfolio value. While not cheap, but considering the fact that we produced 20.7% ROI in January (12.4% return on the whole account assuming 10% allocation), it is completely reasonable.
       
      However, if you had a ticket fee of $8, in addition to $0.75/contract, you would pay $427 in commissions, more than double. In this case, your returns will be reduced by 4.3%.
       
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      The impact of the ticket fee is especially significant if you have relatively small account.
       
      Of course commissions is only part of the whole package. Other factors include tools, platform, customer service etc. Barron's publishes a comprehensive brokers review every year. Here is the last one. Interactive Brokers (IB) was ranked #1 by Barron's third year in a row. This is the broker I personally have been using for the last 7 years and I'm very happy.
       
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      Their conclusion:
       
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    • By Kim
      Hello all,

      I just spent few hours chatting with Kenny Griffin, Manager of the Trade Desk at TOS, trying to get a discounted rate for SO members.

      He offered us an initial rate of 1.50 per contract, with an option to negotiate lower on customer by customer basis. I realize that this might not do any good for many members who are already paying less. However, I believe that some members are still paying more and this deal might be attractive to them.

      Remember: this is an initial rate, you can always try to negotiate less, and your starting point is still better than the general public. I personally still believe that unless you can get 1.00 or lower, IB presents better value, but some people just cannot stand IB, and for them TOS is probably the best option.

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      March 2013 Update:
      Had another session with Kenny. He offered further discount for those on "standard" commissions structure: instead of 9.99+0.75, it is $8.00 ticket + $0.75 per contract for SO members.
       
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      Please note that Anchor Trades members who select to auto-trade those products enjoy 0.75/contract with TDAmeritrade Institutional platform.
    • By Kim
      Options Trading is a business. As in any business, there are costs. One of the major costs is commissions that we pay to our broker (other costs are slippage, market data etc.)
      While commissions is a cost of doing business, we have to do everything we can to minimize that cost. This is especially true if you are an active trader. The impact of commissions on your results can be astonishing.
      This excellent article by Business Insider is asking the right questions (and also answering some of them):
      Click here to view the article
    • By tjlocke99
      Hello. I have a few questions/comments about backtesting in TOS.

      1. If you select that you entered a trade in TOS using the thinkback tool, is the price you enter supposed to be based on the opening price for legs in the options spread for that day?

      2. When you close the trade does thinkback assume you are getting the mid of closing price for the legs in the options spread that date?

      3. Is it the closing price for the underlying that day?

      I always assumed it was based on closing prices, but I just wanted to check.

      Also, I see this as a major issue with backtesting in TOS, you can only base it on whatever open/close condition it uses.

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    • By Mikael
      Background
       
      In Jeff Augen's Volatility edge, he often used a standard deviation plot to look for spikes. He also discussed it in managing basic option positions and using price spikes as triggers to enter. (it starts on page 113 of the actual book if you are interested in reading it). I post a brief synopsis below (straight from his book, because i have the eBook version).
       


        The Mechanics of the Std Dev Study
       
      The following is directly from the book, to give a better idea on how he came up with the idea of this study.
       

       
       
      The ToS Script
       
      To turn on this study you have to go to ToS program > Charts > Studies >  Edit Studies > New > thinkscript editor and paste the following code in. Then just save it as whatever you want to call it and add it to studies on lower subgraph. 
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      http://www.thinkscripter.com/indicator/standard-deviation-price-change
       
      # Tom Utley 3-17-2009
      # Thanks to Jeff Augen
      # Price Spikes in Standard Deviations
      declare lower;
      input length = 20;
      def closeLog = Log(close[1] / close[2]);
      def SDev = stdev(closeLog, length)* Sqrt(length / (length – 1));
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      This is how it looks like in ToS live

       
      Example with AAPL Aug monthly 470 Call 
       
      Possible Entry on greater than 2 STD downspike

       
      Possible Exit on spike 25 minutes later (or set your own p/l% with a limit order)

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