How to Buy Put Spreads and Iron Condor in ThinkorSwim

theelderwand

Active member
2019 Donor
VIP
Let’s look at buying put spreads and iron condors using the ThinkOrSwim (TOS) platform. As always we will stick with SPX for illustration.

DISCLAIMER: ALL TRADE SHOWN HERE ARE FOR ILLUSTRATION PURPOSES ONLY.

How To Buy Put Spreads on ThinkorSwim (desktop version)

Step 1: Navigate to Trade Tab

Log into TOS and navigate to the Trade -> All Products section

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Step 2: Choose the underlying and expiration

Type in SPX in the underlying box and chose the S&P 500 Index. Once you finish choosing you should see the entire option chain pop up right in front of you. Open up the option chain in particular for the expiration that we are looking at. In this case 30th October 2019.

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Step 3: Choosing the vertical

We want to buy the 2940/2950 put vertical, so scroll down to section where we can see them. Next step is choosing the trades. We always buy at the Ask price and sell at the Bid prices.The simplest way to remember this is you buy at a higher price and sell at a lower price.
  • Click on the 2950 Ask on the PUT side
  • Hold Ctrl key and click on the 2940 Bid on the PUT side
LjW06b6.png


Step 4: Confirmation and Send

Click on Confirm and Send, you should be able to see the details of the trade shown with maximum profit and loss and the break even as discussed in the article.

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Click Send to complete the trade.

You have successfully bought a Put Spread in ThinkorSwim.

How To Buy Iron Condors on ThinkorSwim (desktop version)

Step 1 and Step 2 : Follow the above

Step 3: Choosing the Iron Condor

As we discussed in our article, the Iron condor is a combination of a put spread and a call spread, In order to purchase an iron condor of 2940/2950/3040/3050 PUT/CALL, go through the following steps,
  • Click on the 2950 Ask on the PUT side
  • Hold Ctrl key and click on the 2940 Bid on the PUT side
    • At this point we have placed a PUT spread
  • Hold Ctrl key and click on the 3040 Ask on the CALL side
  • Hold Ctrl key and click on the 3050 Bid on the CALL side
The following is what your trade screen should reflect,

Z50nrmt.png


Confirm the following details in the screen,
  • Spread type says IRON CONDOR
  • Adjust quantity as needed
  • Expiry and Strike prices (the call spread and put spread separately)
  • Price to be paid
  • GREEN background indicating that we are purchasing with a debit
Step 4: Confirm and Send

Click on Confirm and Send after your have made necessary adjustments,

pX2s8Ec.png


Click Send to complete the trade.

You have successfully bought an Iron Condor in ThinkorSwim.
 

Madhu

Member
Thanks for sharing this good info. In Step 3 , the price is showing $1.90 debit, for getting profit on this trade what is the minimum price to sell this spread? I am going through normal butterfly options, I was not clear where to sell these debit/credit spreads to get profit.

please help me here
 

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