Generally, an account that is not breaching concentration requirements, can determine how much stock they can purchase by dividing their Funds Available for Trading (Option BP on thinkorswim) by the securities margin requirement. Example Client has the following buying power available:
Full Answer
What can you trade on Thinkorswim?
On thinkorswim you can trade a wide variety of instruments, such as stocks, bonds, mutual funds, ETFs, options, futures (as well as options on futures) and FX. One of the best thing about the platform is the fact that you can take advantage of more than 300 commission-free ETFs.
How do I log-in to Thinkorswim?
After your account is verified and the software is installed, you can log-in easily with just your username and password. Bear in mind that under the username/password tabs, there is the option to choose whether you are using thinkorswim for real trading or for demo trading (the PaperMoney option).
What is options settlement?
Settlement is the process for the terms of an options contract to be resolved between the relevant parties when it's exercised. Exercising can take place voluntarily if the holder chooses to exercise at some point prior to expiration, or automatically, if the contract is in the money at the point of expiration.
What makes Thinkorswim stand out from its competitors?
However, the thing that really makes thinkorswim stand out from its competitors is the wide variety of technical studies– more than any other trading platform. Thinkorswim has something to offer even for those who want to further customize the platform and its features by coding their own trading strategies.
When will my deposited funds be available for trading?
Funds transferred in through electronic ACH have a 3-business day hold on the funds upon effective date which is a day after submitting the request. This hold is for non-marginable securities (over-the-counter stocks, options, futures, forex, etc.). The funds can be used right away for fully marginable securities (generally stocks that are on a stock exchange such as NYSE or NASDAQ).
What is a “Pattern Day Trader”?
A pattern day trader’s (PDT) account is a margin account that has executed more than three roundtrips in a five-business day period. PDT accounts must maintain a day trading minimum equity of $25,000 on any day on which day trading occurs. The $25,000 account-value minimum is a start-of-day value, calculated using the previous trading day's closing prices on positions held overnight. Day trade equity consists of marginable, non-marginable positions, and cash. Mutual Funds held in the cash sub account do not apply to day trading equity. Also, funds held in the Futures or Forex sub-accounts do not apply to day trading equity. To avoid an account restriction, pattern day-trader accounts that fall below the $25,000 minimum equity requirement should not day trade.
Are cash accounts subject to Pattern Day Trading rules?
No. Cash accounts are not subject to Pattern Day Trading rules and as such you would not need to use the day trade counting tools in Thinkorswim.
What happens if I execute more than three roundtrips in a rolling 5 business day period with an account value less than $25,000?
An account that is both A) Flagged as a Pattern Day Trader and B) has less than $25,000 equity will be issued a Day Trade Minimum Equity Call (“EM Call”). The Call does not have to be met with funding, but while in the Call the account should not make any Day Trades. If a Day Trade is made while in the Call the account will be set to Restricted - Closing Only.
What is a good faith funding violation?
Good faith violations occur when clients buy and sell securities before paying for the initial purchases in full with settled funds. Only cash or proceeds from a sale are considered settled funds. Here’s an example of a good-faith violation:
How do I apply for futures approval?
Visit tdameritrade.com and log in to your account. Go to Client Services > My Profile > General. Under Elections & Routing, look for Futures, and click Apply.
How do I trade in the extended session?
To place trades in the pre and post market, you will need to use a LIMIT order and change the TIF (time in force) to EXT (day plus extended session) or GTC_EXT (good til canceled plus extended session).
What is a physically settled option?
Physically settled options are those that involve the actual delivery of the underlying security they are based on. The holder of physically settled call options would therefore buy the underlying security if they were exercised, whereas the holder of physically settled put options would sell the underlying security.
What happens when a contract expires?
Basically, if there's any intrinsic value in contracts at the time of expiration, then that profit is paid to the holder of the contracts at that point. If the contracts are at the money or out of the money, meaning there is no intrinsic value, then they expire worthless and no money exchanges hands.
What is an option settlement?
Options Contract Settlements. Settlement is the process for the terms of an options contract to be resolved between the relevant parties when it's exercised. Exercising can take place voluntarily if the holder chooses to exercise at some point prior to expiration, or automatically, if the contract is in the money at the point of expiration.
Who handles the settlement of options contracts?
Although settlement is technically between the holder of options contracts and the writer of those contracts, the process is actually handled by a clearing organization. When the holder exercises, or an option is automatically exercised, it's the clearing organization that effectively resolves the contracts with the holder.
Is a stock option cash settled?
Physically settled options tend to be American style, and most stock options are physically settled. It isn't always immediately obviously when looking at options as they are listed whether they are physically settled or cash settled, so if this aspect is important to you it's well worth checking to be absolutely sure.
Who handles options exercise?
Whether you are exercising options you own or receiving an assignment on contracts you have written, that part of the process goes relatively unseen and is all handled by your broker.
What makes Thinkorswim different from other trading platforms?
More demanding traders can take advantage of rich backtesting features, custom alerts, sentiment scores, as well as automated trading. However, the thing that really makes thinkorswim stand out from its competitors is the wide variety of technical studies– more than any other trading platform.
What makes Thinkorswim stand out from its competitors?
However, the thing that really makes thinkorswim stand out from its competitors is the wide variety of technical studies – more than any other trading platform. Thinkorswim has something to offer even for those who want to further customize the platform and its features by coding their own trading strategies.
What tab allows you to backtest and analyze real and hypothetical trading scenarios?
Analyze: This tab allows you to backtest and analyze real and hypothetical trading scenarios, as well as dive deeper in economic databases, volatility and probability analysis, etc.;
What is the best platform for trading?
Thinkorswim, a product of the US brokerage company TD Ameritrade, is regarded as one of the best trading platforms worldwide. Thanks to the advanced platform, StockBrokers.com ranked TD Ameritrade as #1 for trading platforms and tools.
What is the monitor tab?
Monitor: The tab to track your trading activity (orders, statements, cash balance, open positions);
What are the benefits of using the Federal Reserve?
One of the main benefits of the platform is the chance to use the Federal Reserve Economic Data and receive constant updates and all that is for free. This, alongside with the fact that you can combine multiple fundamental and technical indicators (there are more than 400 technical indicators that you can use for advanced charting) brings you a whole new-level trading experience.
Where is the working area in Thinkorswim?
The working area of thinkorswim is divided in two main segments – a sidebar in the left and a main window in the center of your trading station.
