If you're an option seller looking to elevate your trading experience beyond basic platforms, TD Ameritrade's ThinkOrSwim (TOS) offers powerful tools that can transform how you analyze, execute, and track cash-secured put strategies. While the platform may seem overwhelming at first glance, the depth of information and analytical capabilities make it an invaluable tool for serious income-focused traders.
In this comprehensive guide, we'll walk through the process of selling cash-secured puts on NVAX (Novavax) and TLRY (Tilray) using ThinkOrSwim, with a particular focus on understanding and targeting extrinsic value to maximize premium collection. This strategy represents a continuation of building a weekly options income portfolio while transitioning capital from Robinhood to TD Ameritrade.
Key Learning Objectives:
ThinkOrSwim represents a significant upgrade from simpler platforms like Robinhood, offering capabilities that serious option sellers need to make informed decisions and track their positions effectively.
While Robinhood offers commission-free trading and simple interfaces, ThinkOrSwim provides critical advantages for option sellers:
The first time you open ThinkOrSwim, the information density can be overwhelming. Multiple windows, columns of data, charts, and customization options create what feels like information overload. However, this initial complexity pays dividends as you become familiar with the platform.
The recommendation for new TOS users is simple: take it one day at a time. Focus on learning one feature or workflow at a time. Start with basic order entry, then gradually explore the analytical tools that differentiate this platform from simpler alternatives.
Cost Consideration: TD Ameritrade charges $0.65 per options contract plus a small per-trade fee. While Robinhood appears free, they profit through order flow and slight premium adjustments. For serious option sellers, the transparent pricing and superior tools of TOS justify the nominal fees, especially when considering the time saved during reconciliation.
The portfolio already held 300 shares of NVAX (Novavax), but the Robinhood account lacked sufficient capital for the next planned cash-secured put. This created the perfect opportunity to initiate the first TOS trade while transitioning approximately $3,000 in capital to TD Ameritrade.
In ThinkOrSwim, accessing options begins with the Analyze tab, where the complete option chain displays. The interface initially shows all expiration dates and strikes, creating a comprehensive but dense view of available contracts.
For this trade, the focus was on the upcoming Friday expiration, targeting weekly options for maximum time decay efficiency. The last trading price for NVAX stood at $16.53, establishing the baseline for strike selection.
The $16.50 strike represented the at-the-money strike closest to the current price. This strike offered a bid-ask spread of $1.03 to $1.15, a 12-cent range that immediately reveals more information than Robinhood typically displays.
Calculating the Mark Price:
The mark price represents the theoretical midpoint between bid and ask:
By targeting the mark price of $1.09, you increase fill probability while capturing reasonable premium. On highly liquid stocks like NVAX, mark price orders typically execute quickly.
Order entry in TOS follows an intuitive click-based workflow:
The ThinkOrSwim confirmation dialog provides transparency that option sellers need:
This level of detail allows you to enter exact figures into cost basis tracking immediately, without waiting a day to discover what actually executed.
Portfolio Tracking Insight: The immediate transparency of TOS execution prices integrates seamlessly with MyATMM's cost basis tracking. You can enter the exact premium received ($108.34 after fees) right away, eliminating the frustrating Robinhood workflow of entering an order, waiting for execution, then updating your records the next day when you discover the actual fill price.
One of ThinkOrSwim's most valuable features for option sellers is the extrinsic value column. This metric fundamentally changes how you evaluate which strikes to sell, especially when comparing similar options.
Every option premium consists of two components:
Real Example from TLRY:
Stock trading at: $3.48
$3.50 Strike Put:
$3.00 Strike Put:
Analysis: The $3.50 strike offers $0.22 in extrinsic value compared to only $0.05 for the $3.00 strike. As a cash flow investor, you're selling time, not value. The $3.50 strike provides 4.4x more time decay to capture.
When you sell options for cash flow rather than speculation, your goal is capturing time decay. The extrinsic value represents the portion of premium that will erode as expiration approaches, assuming the stock price remains stable.
By targeting strikes with the highest extrinsic value, you maximize your earnings from the passage of time. This is particularly important for weekly options where time decay accelerates dramatically in the final days before expiration.
Strikes with high extrinsic value are often at-the-money or slightly in-the-money. This means higher assignment probability if the option remains in the money at expiration. However, for wheel strategy practitioners, assignment is not a problem—it's the planned entry point for acquiring shares at a reduced cost basis.
In the TLRY example, selling the $3.50 strike with $0.02 intrinsic value means accepting potential assignment just $0.02 in the money, but the $0.22 in extrinsic value provides a cushion. The true break-even becomes $3.26 ($3.50 - $0.24 premium), giving substantial downside protection.
With approximately $1,400 in buying power remaining after the NVAX trade, the next opportunity involved Tilray (TLRY), a lower-priced stock with high options volume that makes it attractive for cash-secured put strategies.
Tilray represented a previous holding with overall positive performance. The stock offered several characteristics that make it ideal for continuous wheel trading:
ThinkOrSwim makes it easy to compare multiple expiration cycles simultaneously, revealing the time decay curve. For the $3.50 TLRY strike:
Extrinsic Value Comparison:
Weekly Strategy Advantage: The first week captures $0.22 of $0.34 total time value (65% of the three-week premium). By focusing on weekly expirations, you capture the maximum rate of time decay per day held.
This analysis reveals why weekly options suit cash flow strategies better than monthly contracts. The time decay curve is not linear—it accelerates as expiration approaches. Weekly traders capture the steepest part of that curve repeatedly.
The wheel strategy traditionally starts with cash-secured puts until assignment, then transitions to covered calls. However, a more aggressive approach continues both sides simultaneously:
This bilateral approach requires more capital since you're maintaining both put collateral and share ownership, but it maximizes premium collection frequency.
Based on the extrinsic value analysis, the decision was to sell two contracts of the $3.50 strike:
The buying power effect of $653.30 initially seems confusing when you expect $700 in collateral. TOS calculates this by:
In essence, TOS immediately credits your account with the premium, reducing the net capital tied up in the trade. This accurate accounting makes it clear exactly how much of your portfolio is allocated to each position.
While the primary strategy focuses on cash flow through time decay rather than directional prediction, reviewing the chart provides context for what might happen to your positions.
At the time of this trade, TLRY showed interesting technical patterns:
The general market viewpoint on whether to sell puts when a stock might continue falling divides opinion traders. However, for systematic cash flow traders using the wheel strategy, the directional concern is minimal:
Cash Flow Mindset:
Rather than speculating on direction, the focus remains on finding quality stocks with good options volume and consistent premium. The stocks selected should be companies you're comfortable owning if assigned, at prices reduced by the premiums collected.
One of the underappreciated features of ThinkOrSwim is how clearly it displays your open positions within the option chain itself.
After submitting orders, TOS immediately updates the option chain with visual indicators:
This visual system makes it immediately obvious where you have exposure in the option chain. If you've sold a put expiring in March, that March expiration tab shows the sell indicator, making position management across multiple timeframes straightforward.
ThinkOrSwim color-codes strikes that are in the money, providing instant visual feedback about which positions face assignment risk. This becomes particularly valuable on expiration day when you need to make quick decisions about rolling or accepting assignment.
The platform intelligently groups related positions, such as covered calls and their underlying shares, or multiple puts at the same strike. This grouping makes it easier to see your true exposure at a glance rather than wading through individual contract lines.
While ThinkOrSwim excels at execution and near-term position management, comprehensive cost basis tracking across multiple assignments, rollings, and adjustments requires purpose-built software. This is where MyATMM becomes essential.
The immediate execution transparency of TOS means you can enter exact figures into MyATMM's tracking system right away. Every premium collected, every assignment, every covered call—all tracked with precision to show your true cost basis and realized vs. unrealized gains.
With approximately $800 in buying power remaining after the two trades, the decision was made to keep that capital in reserve rather than immediately deploying it into additional positions.
During a portfolio transition phase, maintaining liquidity provides flexibility:
The remaining $1,000 in the Robinhood account represented capital that would eventually transfer to TD Ameritrade. One attractive feature being left behind: Robinhood's 3.75% interest on uninvested cash, a competitive rate for brokerage accounts.
However, the interest on idle cash pales in comparison to the returns from systematic option selling. Weekly premiums of 1-3% on deployed capital far exceed any savings account rate, making the transfer worthwhile despite losing the Robinhood sweep interest.
The long-term plan involved transitioning the entire active trading portfolio to TD Ameritrade for several reasons:
After submitting orders, the next critical phase involves monitoring execution and making any necessary adjustments based on market response.
Orders placed at the mark price on liquid stocks typically fill quickly during market hours. However, several scenarios might require adjustment:
The next trading day begins with reviewing which orders executed and at what prices. ThinkOrSwim makes this straightforward through the Monitor tab, where you see actual fills with precise pricing.
For any orders that didn't execute, analysis determines whether to adjust the order price or select a different strike. Market conditions change overnight, and what looked attractive one day might need reassessment the next morning.
Once positions are open, weekly monitoring involves:
This weekly rhythm creates a repeatable process that scales across multiple positions and symbols.
While ThinkOrSwim excels at execution and analysis, tracking your true cost basis across weeks and months of wheel strategy trading requires dedicated software. This is precisely what MyATMM was built to solve.
The transparency of ThinkOrSwim execution prices integrates perfectly with MyATMM's tracking capabilities:
As you execute the strategies demonstrated with NVAX and TLRY, your cost basis changes with every transaction. MyATMM automatically calculates:
While TOS shows your current positions, MyATMM provides the big-picture view option sellers need:
This combination—TOS for execution, MyATMM for tracking—creates the complete option selling workflow.
Take the guesswork out of cost basis tracking and see exactly how profitable your option selling strategies are becoming.
Create Your Free Account Track up to 3 tickers free forever • No credit card requiredOptions trading involves substantial risk and is not suitable for all investors. Selling cash-secured puts obligates you to purchase shares at the strike price, which may result in losses if the underlying stock declines significantly. Past performance does not guarantee future results. This content is for educational purposes only and should not be considered financial advice. The strategies discussed require sufficient capital, risk tolerance, and understanding of options mechanics. Always ensure you understand the risks before trading options, and consider consulting with a qualified financial advisor before implementing these strategies. The author may hold positions in the securities discussed.
Transitioning from basic platforms like Robinhood to TD Ameritrade's ThinkOrSwim represents a significant upgrade in capabilities for serious option sellers. While the learning curve exists, the benefits far outweigh the initial complexity.
The systematic approach demonstrated with NVAX and TLRY represents a repeatable process that scales across your portfolio:
This rhythm creates consistent income opportunities whether markets rise, fall, or trade sideways. The key is focusing on quality underlying stocks, consistent execution, and precise tracking.
As you build experience with ThinkOrSwim's powerful tools, you'll discover features and workflows that further enhance your efficiency. Take it one step at a time, master the basics, and gradually incorporate the advanced capabilities that differentiate serious option sellers from casual traders.