But throw a few together on a chart, and they may “indicate” if a stock is trending, which direction it’s trending, and with how much momentum.įire up your thinkorswim ® platform from TD Ameritrade, select the Charts tab, pull up any chart, choose the Studies option, then Add Study, and finally All Studies. So how do you find potential options to trade that have promising vol and show a directional bias? This is where indicators may help. Options traders generally focus on volatility (vol) and trend.
So the challenge is to figure out which options will move within the lifespan of the options contract. Option contracts have a limited lifespan. So which indicators should you consider adding to your charts? Too many on a chart, and you won’t be able to make any sense of potential price direction. You can think of indicators the same way.
