ThinkorSwim Options Broker Review

The one thing I like most about ThinkorSwim is their spectacular trading platform. So far, I haven’t seen anything like it with any other broker. It’s best feature is the ‘Analysis’ tab. This allows you to immediately see a dynamic risk graph which will show you exactly how any trade setup will look. But more than that, it will also immediately show you the new risk graph for any proposed adjustments to existing trades that you might like to make.

This is the sort of stuff that normally comes with proprietary software costing thousands of dollars. Flexible risk graphs that immediately change with every variation you choose to add or subtract from a position is one big plus for this options broker. You can also select a beta weighted risk graph of your entire portfolio for any given time.

Not only that, but the trading platform comes with an advanced charting and technical analysis package. If you’re an option trader and into “the Greeks” you can monitor your individual positions as well as your portfolio as a whole from the perspective of delta, gamma, theta and vega.

The ThinkorSwim platform also includes the “ThinkBack” feature, which allows you to access historical options prices and backtest strategies. You can also do a probability analysis for any proposed or existing trades – for example, the likelihood of a range trading based position reaching one of your break-even points.

Or if you want to scan the markets for the right setups for other strategies such as covered calls or straddles, you can use the scan feature along with the marketwatch facility to access critical information such as upcoming earnings reports and the like.

Trades are easy to execute and you can line them up in an “Order Book” and analyse them before sending to the market. Even the ‘confirm and send’ screen gives you a quick snapshot of the risks and potential profits plus brokerage fees in your proposed trade.

ThinkorSwim has recently been acquired by TD Ameritrade and has been highly rated by Barrons as one of the top online brokers. Opening an account with them is easy (I’ve done it myself) and most of it can be completed through an online process. Shortly afterward, they will ask you to mail, fax or email their forms to them, as well as for proof of identity. If you have access to a scanner, you can easily scan these documents as.pdf files and email to them.

Because ThinkorSwim are geared to frequent traders their brokerage fees are structured in a way that becomes a little more expensive for traders with smaller budgets or a more passive trading style but to me, their cutting edge trading technology is worth it. Still, they aim to be competitive and even offer to mimic the rates of an existing list of other top brokers. You have the option to choose one of these in your account setup as an alternative to their advertised rates.

From what I’ve seen I cannot recommend this broker highly enough. The suite of facilities that they offer is just brilliant. The only downside is that they require a minimum $US3,500 to fund an account. You can still open one without the funds today though and start saving till you have the required amount. In the meantime, you have access to their paper trading platform which gives you an imaginary $100k to play with and test your strategies on.

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