Tos market maker move

Tos market maker move DEFAULT

GetMarketMakerMove

Technical Analysis

Default values:

Description

Returns the value of Market Maker Move (MMM) indicator which calculates the expected magnitude of price movement based on market volatility. This calculation is performed using stock price, volatility differential, and time to expiration.

Input parameters

Parameter Default value Description
symbol current symbol Defines symbol for which the Market Maker Move is calculated.

Example

AddLabel(yes, "Market Maker Move:" + GetMarketMakerMove());

This script adds a chart label showing Market Maker Move value calculated for the currently selected symbol.

Sours: https://tlc.thinkorswim.com/center/reference/thinkScript/Functions/Tech-Analysis/GetMarketMakerMove

Tales of a Technician: How to use the Thinkorswim Market Maker Move Tool

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Last update: June 2021

Prepare for a revelatory experience, one that will make you wonder at the wisdom of the crowd and the efficiency of markets. One of the inputs to pricing an option is volatility. Think of it as how much you expect the underlying stock to move. If you expect it to move a lot, then the option price will be high. If you expect to move a little, then the option price will be low.

Said another way, if you know volatility, then you can solve for an option’s premium. And it works in reverse too. If you know an option’s premium, then you can solve for volatility. That is, you can figure out what the expected volatility is based on an option’s premium. Here’s an example:

Stock XYZ will exhibit 30% volatility over the next month. Knowing that information, I can calculate that its one-month, at-the-money call option should be priced at $5.00.

The one-month, at-the-money call option for stock XYZ is trading for $5.00. That implies that the stock will exhibit 30% volatility over the next month.

Key takeaway: you can look at an option’s premium to determine just how volatile the stock is expected to be.

Who sets the option’s premium?

Buyers and sellers, otherwise known as supply and demand. And while one or two traders may be foolish dunderheads, the market in aggregate is pretty good at estimating how volatile a stock is going to be. That means that most of the time option premiums do a respectable job at forecasting how much a stock will move.

If we’re splitting hairs, the market typically overestimates how much a stock is going to move, but that’s a story for another day.

Now, why is knowing how much a stock is expected to move helpful? Well, for a ton of reasons.

A) It can help you place your stop loss a reasonable distance from the current price.

B) It can help you spot price moves that are abnormal or outliers.

C) It can help you decide which strike prices to use when selling options. For example, you can make a bet that the stock won’t move more than expected by selling options with strikes outside of the forecasted range.

The Market Maker Move (MMM) typically shows up before an earnings release and identifies the expected range a stock should trade in with the earnings gap. For example, Costco, which reports earnings on December 14th (this Thursday) has a MMM of $7.33.

MMM: Market Maker Move

That means based on current option premiums, the expected range for COST is $7.33. We can add/subtract that to its current stock price ($188.86) to get an idea of what that looks like on the price chart.

As shown below the upper end of the expected move is $196.19, and the lower end is $181.53.

$COST: Expected Range.

In case you’re wondering, that doesn’t mean there is a 100% chance that COST will remain in this range through earnings. It represents a one standard deviation move. Essentially there is a 68% chance Costco will sit in the range. That’s the confidence interval. So, if options are correctly priced, and you were to bet that COST would stay in the expected range for the next 100 earnings announcements, you would be right about 68 out of 100.

Do you have to wait until the Market Marker Move feature shows up at the top of your option chain to discover this information?

No!

It’s already displayed for each expiration cycle. That’s what all those numbers are on the right side of the chain. The percentage is the implied volatility for that period, and the number in parenthesis is the expected move higher/lower between now and then. So, for example, the Jan monthly (19 Jan 18) that expires in 39 days has an implied vol of 23.37% which translates into an expected range for COST of up/down $11.62. That means if you were going to sell a bull put spread and wanted to be outside of one standard deviation then you would need to make sure your strikes were at least $11.62 below the current stock price ($188.86).


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Tags: earnings season, market maker move, mmm, Risk Management, thinkorswim, thinkorswim tutorial, tos, trading for beginnersSours: https://tackletrading.com/tales-technician-use-tos-market-maker-move-tool/
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Ask the Coach: Market Maker Magic Move

Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.

Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.

Probability analysis results from the Market Maker Move indicator are theoretical in nature, not guaranteed, and do not reflect any degree of certainty of an event occurring.

Spreads, Straddles, and other multiple-leg option strategies can entail additional transaction costs, including multiple contract fees, which may impact any potential return. These are advanced option strategies and often involve greater risk, and more complex risk, than basic options trades.

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Market volatility, volume, and system availability may delay account access and trade executions.

Past performance of a security or strategy does not guarantee future results or success.

Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.

Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.

TD Ameritrade, Inc., member FINRA/SIPC, a subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2021 Charles Schwab & Co. Inc. All rights reserved.

Sours: https://tickertape.tdameritrade.com/trading/tdameritrade-market-maker-move-thinkorswim-mmm-18290
Thinkorswim (TOS) Tutorial: How to determine the Market Maker Move (MMM) for earnings gaps

What Might Implied Volatility Be Saying? Listen to the Market Maker Move Indicator

Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.

Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.

Probability analysis results from the Market Maker Move indicator are theoretical in nature, not guaranteed, and do not reflect any degree of certainty of an event occurring.

adChoicesAdChoices

Market volatility, volume, and system availability may delay account access and trade executions.

Past performance of a security or strategy does not guarantee future results or success.

Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.

Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.

TD Ameritrade, Inc., member FINRA/SIPC, a subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2021 Charles Schwab & Co. Inc. All rights reserved.

Sours: https://tickertape.tdameritrade.com/tools/market-maker-move-indicator-implied-volatility-16084

Market maker move tos

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What Is thinkorswim’s Market Maker Move? - Cameron May - 9-6-19 - Options Week in Review

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