Option yield charts
One tool that can help you analyze price behavior more closely is OnDemand for thinkorswim. You see how price behaved when it reached option yield charts certain point such as a support or resistance level by going back in time.
Say you pull up a price chart of a stock you want to trade and see that price came close to a support level and has started moving up Figure 1. You look back on the chart and see price hit that support level on July 31, For illustrative purposes only.
What was the price action in the options at that time? OnDemand is effective for understanding how time decay or volatility impact options prices, especially during major events such as earnings releases, as options get close to expiration, or price action at technical levels.
This can take you one step closer to making more educated trading decisions. Visualize the Yield Curve Do you know if the yield curve is inverting, flattening, or steepening?
And you can keep an eye on the yield curve on your thinkorswim platform by looking at a chart of the NoB spread. The chart in Figure 3 is a line chart of the NoB spread.
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The 2 in front of option yield charts symbol is the weighting on the contracts, which depends on the ratio of the spread. This information can be found on the CME Group website.
- Dynamic Yield Curve The Dynamic Yield Curve tool shows the relationship between multiple interest rates and stocks over time.
- Daily Treasury Yield Curve Rates
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- An interest rate option is a financial derivative that allows the holder to benefit from changes in interest rates.
The yield curve steepens if economic conditions are looking strong. If the reverse happens, the yield curve starts flattening.
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You can chart the difference between the longer- and shorter-term yields and see if the yield curve is flattening or steepening.