Thinkorswim Caters To Traders In Options And Equities


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Thinkorswim isn't exactly a run-of-the mill trading site . The firm launched in 1999 in Chicago and targets self-directed traders, particularly those specializing in buying and selling options and derivatives.

TD Ameritrade ( AMTD ) acquired it in 2009 for $606 million.

Rather than make major changes, it retained Thinkorswim's headquarters in the Windy City and kept its trading platform, client support and technology team.

Thinkorswim -- one of the site cited in the Best Online Brokers survey -- says its distinctive capabilities offer research, charts and historical data that yield traders a competitive edge.

The site targets "sophisticated investors who trade equities and derivatives," said Steven Quirk, Thinkorswim senior vice president.

It also offers trading platforms in mutual funds, exchange traded funds, fixed income, futures and foreign exchanges.

What appeals most to savvy investors is its integrated trading platform, said Quirk: "It's all integrated -- equity, options, stocks, futures and foreign exchanges."

Clients can trade all asset classes in one place for one-stop buying and selling.

While many investors focus on equities, Thinkorswim has seen a spike in options trading, which involves buying or selling an instrument at a price on or before a specific date. Options used to compose 9% of its trading. By 2012, such trading had rocketed to 40% of all transactions. More than 80,000 clients placed their first options trade in the past 12 months.

Overall, Thinkorswim traders are on the go; 8% of its daily trading arises from mobile phones, says Kim Hillyer, a TD Ameritrade spokeswoman. Mobile devices help traders invest as they golf or dine. "They can't get back to their laptop, and mobile is one way to close a trade," Quirk said.

Thinkorswim's OnDemand feature provides a historical overview of the market and replays any trading day since January 2009. If traders want to checkApple ( AAPL ), they can see what it was trading at a year ago and view economic and historical forces that affected the market.

"You're seeing the whole movie, including news on technology and historical trading," Quirk said.

To help investors conduct research, Thinkorswim includes news feeds and videos from CNBC in America, Europe and Asia.

It also offers chat rooms where investors discuss trading and elicit feedback from fellow traders. "People are watching the news, formulating an idea and want to validate with like-minded people. They don't want to make an investment as an island," Quirk said.

Adam Warner, author of "Options Volatility Trading: Strategies for Profiting From Market Swings," traded on Thinkorswim and got into top charting and analytics. "It's easy to read a stock's volatility history, how the stock price has gone up and down," he said.

Warner also adapted quickly to its trading platform.

"It's very intuitive," he said. "It's not that expensive, and its technology is as good as anyone's."

What's the symbolism of its name, Thinkorswim?

Quirk said it doesn't really mean anything: "No hidden meaning. What's a Google or a Yahoo?"

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance Investing Ideas
Referenced Stocks: AAPL , AMTD

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