Hi. I am looking into adding options into my trading and investing strategy. What I am interested in learning is the relationship between technical signals in the underlying instrument and price changes in the option. For example ( and only for example) suppose my plan was to buy a call whenever the MACD crossed above its signal line. I would want to know, since that is a lagging indicator, if option price had already moved significantly, or rather if it tends to. I need to see and understand how option price moves in relationship to various instrument indicators and to the instrument price in general. Basically so I know what is worth looking at.
So what I think I need is where and how to get historical option price data. Can anyone tell me where to get that.
Also since I am rather new at options, if this is wrong feel free to say so. That would also be appreciated.
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I'd be cautious about this strategy, if only because you are looking at a relationship between an indicator derived off price action but based off of previous data, and an option that is a derivative but value is determined based off future expectations. It is a lot of spinning parts in this theory, both of which are correlated with stock movement but neither are @ 100%
^^^ On ThinkOrSwim Right click the specific option you are interested in and select 'copy to clipboard' or something like that. When you paste the info into the ticker search, it will pull up the option's specific price chart
The following user says Thank You to Bermudan Option for this post:
Trading Options from Technical Set ups of Underlying
You are working on the same Strategy as i am, as far as Trading Options based on Technical Set ups of the Underlying Instrument.
No matter what that Instrument may be Futures , Indexes, ETF's, Stocks...you can trade Options on them with TOS platform under one account.
What i do is what Bermudan Option explained with Underlying Chart with Several Option Strike Charts within the same workspace as to Compare to the Movement of the Market Set up.
what you need to do in TOS is go to:
..."TRADE" and enter the Symbol of the Instrument you want to get Option chain on......then..
Option Chain data will populate below and you will have Choices of what Months as well as which week in the month (weekly) Options you want to trade.
At this point you can Customize how you want to view the Option Chains by clicking...
"LAYOUT" and setting up what the Line of data will contain for each Strike and in what order:
example:...Open,High.Low,Last.Delta,Bid,Ask...or what ever you want that line of Data to contain for the Strikes in the Option Chain.
The one thing you want to add in this field aside from the normal things i mention is "Option Code"
This is the Symbol for that Particular Option Strike you want to get the Historical Data on.
Once you add this you can see it in the line of Data for the Strikes and can simply left click/highlight it...then right click it and send it to TOS charts and be able to see the Chart/Price action of that Option...just like the Chart of the Underlying.
You can also just see the Symbol and enter that into the same field as how you would a Symbol of any Underlying Instrument to see it's Chart.
I usually set up a Window with a grid of as many cells as i want to view the Underlying as well as how many Options i want to view/Compare to the Underlying that is within that Window/Workspace.
This will help you Compare what Options you would want to Trade on that Underlying Technical Set up as All your Options are right in the same Workspace showing the Options Price Action in Chart form just like the Underlying that you are used to viewing.
Sorry for the long winded explaination
I have attached a Workspace of GOOG , it contains 6 Cells the 2 charts to left are GOOG 2H & Daily Top&Bottom and the other 4 Charts are Option Strike Price Charts at the money & out the money Options that Expired on 12-27-13