Annualized ROI (Return on Investment) in Options Chain For ThinkOrSwim

[TeFLoN]

Hello,
I've always been a lurker and never contributed and I figured some folks would really like this. I like to sell PUTS and CALLS. It just became too tedious to always determine what ROI my strike/options premium I was selling by punching it out on a calculator. So, I figured out a nice tidy custom script to add to your list on the options grid that immediately tells you in real time what your annualized ROI is going to be!

I shoot for 30% annualized on all of my trades. Therefore, the numbers turn red if below 30% (you can change it if you like). So for this example if you're thinking of selling the 17 Nov JPM Puts to get a 30% ROI you need to select the 134 strike with a .4 Delta. If that's too close for you then you need to move on! It's a beautiful way of seeing how much juice is in the options!!

Speaking of JUICE, look at the second example of PLTR! The ROI is INSANE at a .4sh Delta. Of course, its a week from ER, but you get the point!

I hope you guys like this. It was a sigh of relief to figure this out. Have fun!

For those of you less TOS savvy, select "layout" on the options grid and "customize". Then drag over a custom data line. Use the example below. You have to touch the little scroll "thingie" to copy and paste this code into:

# Custom Annualized ROI Script for thinkorswim
# Define the necessary variables
def optionPrice = bid; # Using the bid price as the option price
def daysToExpiration = GetDaysToExpiration() - 1; # Subtracting 3 days
def strikePrice = GetStrike();

# Calculate ROI
def ROI = (optionPrice * 365) / (daysToExpiration * strikePrice);

# Display ROI in the custom quote column
AddLabel(yes, "ROI: " + AsPercent(ROI), (if ROI >= 0.30 then Color.GREEN else Color.RED));

 

[kelvin]

def optionPrice = bid;

this shows mistake, appreciate if you can figure it out.

thanks

 

[majidg]

the code

def optionprice =bid

giver error no such variable as Bid

 

[MerryDay]

An error occurs when attempting to paste this COLUMN script into a chart study tab.

Read more about the foibles of using bid / ask in scripts:
https://usethinkscript.com/threads/...s-watchlists-and-scans-for-thinkorswim.10626/

 

[DavidD]

I copied this in and it looks great. Thank you.
Question...when I did it, I forgot to rename it. How can I rename it and edit the code?

thanks

 

[MerryDay]

I copied this in and it looks great. Thank you.
Question...when I did it, I forgot to rename it. How can I rename it and edit the code?

thanks

To rename a script:
1. right click on the study
2. select rename

To make a copy of a script
1. double click on the study
2. in the bottom right-hand corner, click on Save As

 

[krtns]

is this similar to the "covered return" field that is present in the option hacker? can this be used to filter options there?

 

[rvaidyamath]

HELLO I'm not sure the calculation is correct : Let us say ABC is current price is $100; a month from today call bid price is $90 (deep in money) is $11; so we get this ABC 100 shares purchased for $8.900 (sell for $90) and month later its trading at $95;; as the strike is for 90; so trade gets closed/assigned for 9000; / so the profit is $100 ($9000 - $8.900 ) ; return on investment is $100/8900 * 100 = 1.12% (for consecutive 12 months it could be around 13.48 % ....

Best
Raj

 

[groovy jeff]

Hello,
I've always been a lurker and never contributed and I figured some folks would really like this. I like to sell PUTS and CALLS. It just became too tedious to always determine what ROI my strike/options premium I was selling by punching it out on a calculator. So, I figured out a nice tidy custom script to add to your list on the options grid that immediately tells you in real time what your annualized ROI is going to be!

I shoot for 30% annualized on all of my trades. Therefore, the numbers turn red if below 30% (you can change it if you like). So for this example if you're thinking of selling the 17 Nov JPM Puts to get a 30% ROI you need to select the 134 strike with a .4 Delta. If that's too close for you then you need to move on! It's a beautiful way of seeing how much juice is in the options!!

Speaking of JUICE, look at the second example of PLTR! The ROI is INSANE at a .4sh Delta. Of course, its a week from ER, but you get the point!

I hope you guys like this. It was a sigh of relief to figure this out. Have fun!

For those of you less TOS savvy, select "layout" on the options grid and "customize". Then drag over a custom data line. Use the example below. You have to touch the little scroll "thingie" to copy and paste this code into:
View attachment 20038

# Custom Annualized ROI Script for thinkorswim
# Define the necessary variables
def optionPrice = bid; # Using the bid price as the option price
def daysToExpiration = GetDaysToExpiration() - 1; # Subtracting 3 days
def strikePrice = GetStrike();

# Calculate ROI
def ROI = (optionPrice * 365) / (daysToExpiration * strikePrice);

# Display ROI in the custom quote column
AddLabel(yes, "ROI: " + AsPercent(ROI), (if ROI >= 0.30 then Color.GREEN else Color.RED));

going to try it out

 

[jjstef]

Thanks.