thinkorswim contingent orders Strategies and Techniques

Contingent orders can be a powerful tool for traders on thinkorswim, allowing you to set specific conditions that must be met before an order is executed.

One key strategy is to use a contingent order to limit potential losses, such as by setting a stop-loss order that automatically closes a position if it falls below a certain price.

By doing so, you can help minimize your risk exposure and protect your capital.

For example, if you buy a stock at $50 and set a stop-loss order at $40, the order will be triggered if the stock price falls to $40, automatically closing the position to limit your losses.

Contingent Orders are a type of advanced order that allows you to automate trades based on specific conditions. They consist of a trigger criterion and an order, which is automatically placed when the trigger criterion is met.

A contingent order can be based on the price of any stock, ETF, selected indices, or even the price of an option contract. The trigger type can be as simple as a stock price reaching a certain level, such as Facebook (FB) going above $290.

To create a contingent order on thinkorswim desktop, you start by navigating to the Trade tab and entering the underlying security. You can then use the option chain to select an expiration and initiate a buy or sell order. Preset Order Entry selections appear, and you can add conditions to the order by pointing to the area next to BEST and selecting the gear icon.

The Conditions section allows you to add a conditional date and/or price to the order. You can also set your order to cancel in a few days if the conditions aren't met. To add conditions tied to factors other than time, you use the table to enter a trigger, such as a price target at a threshold of $42.

Here are the five common types of conditional orders:

A contingent order can be used to buy 5 shares of AAPL the next time the market is up more than 1% in a day. The trigger criterion is met when the Day Change % Up is greater than 1%, and the order is automatically placed when this condition is met.

Contingent orders are a powerful tool for automating trades, and thinkorswim offers several types to choose from. The most common types of contingent orders are: Contingent orders, Multi-Contingent orders, OTO (One-Triggers-The-Other), OCO (One-Cancels-The-Other), and OTOCO (One-Triggers-A-One-Cancels-The-Other).

A contingent order consists of a trigger criterion and an order, and is automatically placed when the trigger criterion is met. For example, an investor can set a contingent order to buy 5 shares of AAPL the next time the market is up more than 1% in a day.

Multi-contingent orders are similar, but consist of two trigger criteria and an order. You can indicate that both criteria must be met or either one can trigger the order. For example, an investor can set a multi-contingent order to sell 100 existing shares of XLE if both the Dow Jones index and the S&P 500 index are down by 2% in one day.

OTO (One-Triggers-The-Other) orders are used when you want to set a primary order and a secondary order that will be triggered automatically if the primary order is cancelled or filled. For example, an investor can set a primary buy limit order to buy a stock at $85, and then set a secondary stop loss order to sell the stock if it falls below $80.

OCO (One-Cancels-The-Other) orders are used when you want to set two orders that will be automatically cancelled if one of them is filled. This is useful for setting a stop loss order that will cancel a primary order if the stock price falls below a certain threshold.

OTOCO (One-Triggers-A-One-Cancels-The-Other) orders combine the features of OTO and OCO orders. They are used when you want to set a primary order and a secondary order that will be triggered automatically if the primary order is cancelled or filled, and also cancel a third order if the secondary order is filled.

Here are the five common types of contingent orders in a quick reference table: