ThinkorSwim seminar notes

I attended a free ThinkorSwim seminar in Los Angeles today. A few notes:

* The word on the street is that most pros are short. When instructor Don Kaufman was asked at break time, when he thinks the market is going down, Kaufman quipped "six weeks ago."

* ThinkorSwim preaches defined risk, and having time decay working in your favor. For covered calls, the calls are sold with 4 to 10 weeks of time at deltas of 30% to 40%. Roll the call position with 4 to 10 days left.

* A good deal of time spent on Iron Condors, a delta neutral strategy where time is on your side. For SPY Kaufman prefers two dollars wide, again with a 66% chance of success. If this kind of option talk is all Greek to you, you probably aren't authorized to do these option spreads (you have to request that level of trading).

* Options on widely traded liquid stocks such as SPY are almost always priced correctly. The big firms have computer programs that sniff out mispricing and will quickly put prices back into line when the programs find an opening.

* Next on the horizon for ThinkorSwim customers is Prodigio, software that will automatically place real money orders based on user selected criteria. The user can set up a trading system, it can be simple or extremely complicated, and then lets the program run the money. It is kind of scary to think about that kind of future, but it is coming soon to a computer near you.