How To Make Dough
The creator of thinkorswim and tastytrade has created a new visual trading platform. We signed on for the beta test.
Tom Sosnoff can’t seem to sit still. The creator of the thinkorswim trading platform and the tastytrade Web-based financial video network is now testing a new visual trading platform called dough. The Electronic Investor signed on as one of several thousand tire kickers and recently had a chance to review the site. Here are our thoughts.
Dough acts as an analytical platform, helping you find profitable trades. It has six modules: a trading panel, a monitor of other traders, portfolio analysis, the Grid (which tracks stocks), an activity summary, and a trading journal. The interface guides you through constructing a trade, and is designed to show you the effect a trade will have on your portfolio. “We designed dough to put the fun and the challenge back into finance. Regardless of age and domain experience, dough engages through investible content,” says Sosnoff.
The interface looks like an iPad app in portrait mode. Buttons along the top of the screen let you choose from a variety of options strategies; setting up a stock trade is also possible. You can design a strategy yourself by dragging and dropping icons shaped like shields, which represent stocks, calls, or puts. Options are displayed with strike prices on the horizontal axis, and expiration dates along the vertical axis. As you build an order, one of dough’s key features comes into play: the probability of profit. You can adjust the order by, say, widening the spread on this screen, and the updated probability is displayed. Once you have an order you’d like to execute, pressing the Confirm button generates a text description.
The dough platform also connects to the live broadcast of tastytrade, as well as instructional videos about trading called doughtv. A group of traders (including Sosnoff) is displayed on the opening screen; you can follow one or more of them and see exactly what they’re trading. Each trader’s current return on capital and probability of profit is prominently displayed.
The Grid is a series of color-coded tiles that help you monitor the stocks in which you’re interested. You can add symbols to the Grid and manage a variety of watch lists. Each tile displays the current price, whether the most recent tick was up or down, and the net change in value for the day. The color of the tile—green for rising prices and red for declining ones—allows you to track your stocks.
There’s a circle in the middle of each tile that represents the stock’s volatility compared with its historical range. A nearly full circle indicates that volatility is high, which means that the stock’s price could change dramatically in a short period of time. A nearly empty circle means that its value is not expected to fluctuate wildly but rather shift gradually over time. Dough recommends that you look for stocks at the extremes of their volatility range to get the most out of price changes; the display lets you quickly scan for nearly full or nearly empty circles.
THE TRADING JOURNAL is a slick way to monitor your ideas and orders, and lets you store screen shots of your trades along with market data.
If you have a TD Ameritrade brokerage account, you can execute trades from dough; if you trade elsewhere, you can enter your trades manually. You can open a TD Ameritrade account from within dough and receive commission-free trades for 60 days. (TD Ameritrade purchased Sosnoff’s thinkorswim electronic brokerage in 2009, and the two retain close ties.) There could be other broker links in the future. Dough will be free once it’s fully up and running.
A recent show on tastytrade, which broadcasts eight hours of live programming every weekday beginning at 7 a.m. Central (the firm is based in Chicago), features Sosnoff’s daughter, Case, the business team’s director of Website development. She hosts Where Do I Start?—an entertaining way to learn about trading strategies as she peppers her father with questions that range from technical tips to musings about his sanity.
Case also represents dough’s target audience—who are tech savvy but still learning about investing. With its highly visual, almost gamelike, interface, dough could be the sort of tool that brings in newly minted options traders.
We found it to be a well-designed application that provides several unique tools. You can weigh in with your own beta test at dough.com.