 and we are testing testing one two three this is a quick run through I want to see if I can make this thing fit in a video without making it too long a couple of days ago weeks ago I made a video I don't know if you guys watched it was a thinkorswim and it was about how to create filters and that was over here in the scan tab right okay so we pretty much covered how to filter how to get for example scanning in the S&P 500 and excluding all the penny stocks we could create a filter in this case using a pattern although normally you would create it using specific parameters for a stock or an option or fundamental or study in this case the one that's added is one for a pattern so it would find stocks that had a double top for example within the last 10 days in the 15 minute time interval so he ran this scan it would go ahead and look and find let's say IBM or the NASDAQ itself so according to this you know you got IBM with a double top double top now it doesn't mean that you always find what it sees but let's see if we can do this real quick although this video is not on scans all right so here is this is 30 minutes so let's go to the last 10 days 15 minute I thought there was a well that should be actually should work see if we can find it exactly when a customize this and make it 10 day 15 minute and let's see here okay on the 15 minute and that apply it that's the one we want okay I guess it doesn't apply it automatically there it is okay so according to this scan IBM has a double top somewhere so it's probably looking at this one here you know bounced off of resistance bounce again that's the double top so it would be thinking that this thing is gonna start heading back down all right so we're not gonna review review any of that stuff but I will soon cover in a new video how to create automatic scans so you can actually save this and come back to this you can come like a watch list right so if you come over here to the hamburger icon you can save this as a watch list okay and you can call this let's say double top watch list right you know what let's make this shorter just because I know that later on things don't fit okay so there's the watch list and if you come over here then you can look for that watch list right in personal there it is okay now this is a watch list so what this means is that this will remain a list with these two items in it okay and you can go ahead and run this and actually set an alert for it if you want to right and and we'll run over that in another video basically just come over here and you say okay you know as a symbol is added in to top watch list we're gonna call it double top alert right then you can notify you know with a sound like a bell make it seeming different because everything else is a bell two chimes alright actually that's a very common sound as well let's do a ring yeah that's definitely not common okay and I can also have it send push notifications to my mobile device okay and don't not sure okay so yeah you can send me a message every time or every time or on an hourly basis if that change happens and from a certain date to a certain other date and that's it and then you create this and what will happen is that during the let's say during the day or the trading week the symbols might fall out eventually and new symbols will be added right and so whenever that happens and you'll get an alert so that's one way to do it with watch lists but you can also you can also save this as a scan query and what that does same thing here so it'll be a double top query okay you save that and you come over here okay and you go to personal and there it is and as you can see the difference between the top watch list and the top query is that the query has this purple icon on it and what that means is that this is an automatically updating scan okay so it will automatically update with any new changes you don't need to create an alert for it or anything and it'll just automatically add you know in or out whatever whatever fits the criteria of that scan query that you just create okay so having reviewed that it's just something which actually belonged to the previous video let's go ahead and move over to what we're gonna be looking at today and it's basically this analyzed have me get this out of the way basically this analyzed tab here okay and and also a little bit of the trade tab okay because there's a few things that a lot of people miss so for example this is when we're taking mostly single calls although it obviously you know the concepts apply to spread spread strategies like verticals and whatnot but let's just go ahead and look at a monthly expiration the May today is April 15 we're looking at about 30 days out 34 days out okay so you look at this and let's go and do Amazon because that's what I had worked this out on okay so you have Amazon right it's trading at 1 or 251 and here are your call strikes your calls and here are your puts right and we all know at the money which is which is actually in the money the 100 strike for May it's 695 to buy right now okay and what I want to cover over or go over are the Greeks and the fact of the matter is that not a lot of us traders use the Greeks and probabilities or statistics when we're looking at these trades that we're putting on so I wanted to quickly review and and maybe you know gloss over some of these less utilized although very helpful parameters so okay let's go over what this means we have the 100 strike 30 days out and this call or this option contract is going for 695 right and if we glance over to the Greeks over here the Delta is 62 now what does that mean it means a couple of things number one it means that there is a 62 or this is the way a lot of traders interpret this there's a 62% probability of that option ending up in the money okay now something that you might not be completely clear about is that that 62% is the probability of that option at that strike ending up or expiring in the money on that particular expiry date which is May 19th the thing is that that option might move up and down obviously is going to move up and down and oscillate quite a lot from now until May 19th 34 days from now so what does that mean it means that this 62% although it might look might look great there will be a lot of ups and downs in between and I'm sure that all of you in the discord community have seen and taken alerts from analysts and the minute it starts going against us we jump out you know be it because we didn't really analyze the the trade enough before we jumped into it we just took the alert blindly as it is always discouraged and but you know that's what we signed up for a lot of us you know we want to get expert alerts expert signals and we don't want to do due diligence right well we get out of the trade for a loss and then a couple days later it goes in the money and weigh in the money and that's why a lot of us traders end up with losses you know and and you're like how can it be if we look through the discord community end of the day statistics we're like you know this guy made 60% 100% 200% and and we turned out a loss you know and then you know we start complaining in the chat in the chat like oh man I can't believe I lost so much money and then you know those analysts that put up those alerts and did really well during the day they come back and they're like well wait what do you mean you came out but I mean did you take my trade and they're like yeah I took your trade like well I got out for 100% what did you do oh I got out for like minus 50 well that's because they probably knew when to get out and that is what this delta is talking about this is referring to the probability of this specific option contract of a $100 May 19th being in the money on May 19th all right there's a lot of things that can happen from now until May 19th and it has to do with gamma and theta and Vega obviously and the underlying price now let me just show you something that you might not know about which is if you go up here to the gamma you click on this and you come down here to theoretical in Greeks look at this option here called probability of touching okay let me go ahead and click on that now let's look at the gamma before we do that what is the guy trying to get that off what is the gamma telling us on this 100 okay what it tells us is today which is April 15th assuming that this were a trading day okay the delta is telling us that this 695 is going to be $62 greater for every dollar that the factual price current price goes up so it's 102 51 on Monday if this thing opens at 102 51 and it goes up to 103 51 okay and that means that our option contract is going to go from 695 to 695 to 62 right so it's basically going to be worth see here 62 is 757 so 757 instead of 695 that's what that means and what does it also mean is that it has a negative theta of course time decay of $8 so that means that at the end of Monday even if this thing is up at 103 51 our contract is going to be 757 but it's at the end of Monday it's also going to be $8 less because of time decay so minus $8 it's actually going to be worth 749 okay and I'm going to open up real quick if I can find it here I believe in here I had a quick spreadsheet that I wanted to kind of use to draw up an example see here there it is options yeah all right okay so here it is you know you have your stock price you have I was looking at a different one I was looking at the 102 so that's 196 that's this one here okay because it wasn't May 19th let's jump over here to April right so here's the 102 right we can use this as an example so it's 59 10 and 14 right Delta gamma data so 59 right 10 and 13 okay so what that means is that this option price right now 196 which is right here on the next day if it goes up by $1 then it's going to go up $59 which is or 59 cents which is the Delta now the next day it's not going to be 255 plus 59 because Delta changes so once it not because of the day because of the new strike because of the new price okay so once it reaches 102 the Delta stops being 59 which is what we have here okay and once it reaches 103 the new Delta is 69 not 59 so how do we know that because that's what the gamma tells us gamma tells us how much the Delta is going to change based on whatever the strike price is so now our Delta is going to be 69 so for the next day we're not going to use the 59 on top of the actual price we're going to use the 69 on top of the 255 which was the new price and it keeps going right it keeps going all right so for every dollar it goes up it goes up because of the Delta but the Delta also goes up it goes up from 59 to 69 79 89 so on and so forth all right and then the Theta is the one that works against us when we're talking about calls because it decays every day all right and as you can see here this one is this one decays at 13 okay so this will go up 59 on the first day by the end of the first day it will also decline by 13 okay so it won't be 255 it'll be 242 so you take the current value of your of your option you add the Delta for that strike for that new strike that new dollar move and then you subtract the Theta right okay so over here you have the options and theoreticals something called the probability of touching now let's go ahead and add this in and it replaces the gamma with this probability what does this mean okay this means that because the actual you know chart or the actual movement let's say that we were here because it can go it can go up and down and up and down and up and down and up and down it might reach the price right but it might come back down from that price right so if it comes back down from that price it's no longer at that strike so you're losing money right now the Delta tells you what the probability of you reaching this price is on expiration date probability of touching just as you might expect is the probability probability of this of this option contract actually touching or the the strike actually touching that price okay so come back over here sorry okay what this is telling us is that even though the probability of this contract ending above 103 which is the strike right on April 21st which is six days from now it has a 93 percent probability of actually reaching 103 and then maybe pulling back from it okay so that is actually telling you it might reach that price it might not stay above that price that probability is a lot less it's only 48 but there is a 94 almost percent chance of that reaching that strike which is as you probably imagine a lot more useful but then you have to be on top of it right because it might reach it but then it might come right back down okay so that's one thing one thing that a lot of people don't usually know alright let me cover let me leave it back on gamma okay the other thing that a lot of traders don't use is this market move over here this is the market maker move which is something specific to the thinkorswim trading platform and what this is telling us is that this has an expected move expected move of either plus or minus three dollars and forty cents so what this means is that from 100 and 251 they are expecting a move of either up to 105 or low down to 99 alright so that will give you an idea as if you're going too far out of the money because you're looking for that cheaper contract well if it's above 103 or that would be 105 100 pretty much 106 anything above 106 should have a very low probability of actually ending up in the money which is also reflected in the delta because as you can see normally you want to take deltas 30 or above significant significantly below 30 is something that is considered you know a little bit or not a little bit but something that's considered statistically improbable so that is definitely above the market maker move alright so that is something that might also help you when you're reading through these options chain and the other one is what we talked about is this probability analysis alright now what is this thing telling us so this is really cool because you could actually track the probability of the different prices you have prices up on the vertical axis and you have days to expire your days from now rather on the horizontal axis so what is this telling us this is telling us that it's currently at 105 51 102 51 and if you're gonna be getting the which one did we say and go back here we're talking about the 102 that's obviously in the money let's talk about that 106 which is a you know way out let's see here okay so what about 106 okay well let's look for 106 on the vertical price chart or price axis and there's 106 what is the probability of this being at or above 106 on April 21st as you can see as I as I move horizontally that probability is going to be 27% alright which is pretty close to what the Delta was telling us here but this was going to be actually saying there it is hey the 106 or so yeah the 106 is 21% probability of being in the money so if you go to 106 on there it is that's right on it 106 kind of this is so sensitive there it is okay so 28% probability of that stock reaching 20 106 or above and that therefore it has a 71.1% probability of being at 106 or below okay so you can actually move around around these and it should make sense to you the further out you go if you go over to here you know a few days later then seven days later actually then the probability of it being at or above 106 actually jumped from 28 I believe to 34% right because there's more time if you go further out on the six there it is it's even greater it just went up to 37% okay and the same thing works to the downside right so if you're working with puts then you can also get the probability of this being at or below a certain price range as well and if you go down here at the table you can actually see those probabilities without you having to scroll around because you can see how sensitive this thing is without you having to scroll around all over the place you can actually get those probabilities here when what is the probability of this being you know between 102 and 112 well it's 44% that's actually pretty good and you can you know keep going further out you can also control these ranges by using these price slices okay and the price slices are very useful you can set them up to be 10% if you want to be 10% and you can set these over here I believe right so you can set slices if you want them to be at 10% plus or minus 50% much but plus or minus you want to be one standard deviation you know plus or minus and so that'll switch to one standard deviation above one was one or 2.7 and one standard deviation below 1 2.7 and then that automatically adjusts this as you can see anything above 109 which was your first target to the upside and anything below 96 28 which is your target to the downside and then you have the two ranges from from your lower target to your current and from your current to your higher target all right so this is a very useful table and chart because it lets you see what the probabilities of these things are okay and remember these probabilities are all at expiry the only one that's the probability of touching is the only one that'll give you something that might happen before expiry and there's the risk profile I believe we covered in a different video I'm going to tag to here as well and this has the same slices and you can see graphically what's going to happen between your price slices and your breakeven points on the red bars and you can see this gray area which is the probability range which is currently set for one standard deviation but you can also change that and you can also change the date right so I hope you found this video informative and I will be trying to cover some more of the things that thinkorswim has to offer is a very awesome platform don't forget to subscribe to the channel to be notified of all these events and also don't forget that if you use my link which is also linked here in the description my link to sign for sign up for a X trades membership plan I will personally give you a guided tour of the X cord sorry the discord X trades community and the mobile app as well if you want to and I'll even throw in your platform of choice if I happen to know about it enough that I can help you out with it and so don't forget to sign up for the X trades membership plan as well and use my link and I'll give you that free video guided tour all right happy trading and I will catch you guys next time