Be Careful Evaluating P&L on TOS

Discussion in 'Beginner Traders' started by Bill Lasko, Aug 4, 2017.

  1. Bill Lasko

    Bill Lasko New Member

    As a new trader I was making a foolish misinterpretation of P&L on Thinkorswim - I'm sharing this experience so others may avoid this oversight.
    TOS displays and tracks P&L only for those trades you have on at the moment - so if, like me, you're placing and monitoring a Road Trip Trade - it will display profits that aren't really there after you begin to perform your Reverse Harveys, or other adjustments.

    Unlike OptionVue which keeps track of all profits and losses from the time you open your trade until it's done - TOS just keeps the active trade components - and if like me you take TOS P&L at face value you will grossly overestimate your expected returns.
  2. Dot

    Dot Well-Known Member

    I have been trading without third party software, just TOS, for years. All you need to do is to bring over your trades into the Analyze Tab and you will have an accurate P & L figure.
  3. Kevin Lee

    Kevin Lee Well-Known Member

    One thing to note is the P&L in the Analyze page is not based on actual mid prices but rather on TOS simulated model prices. That's true for both Simulated Trades as well as Existing Position in the Analyze page. If you set the model to individual IV, the difference between simulated P&L and actual mid price P&L is small but that varies. Sometime it can be significant. Therefore you have to be careful. If you set the model to Volatility Smile Approx, then the P&L will be way off.

    In TOS, if you want to see your position P&L based on mid prices, you have to look at the Monitor tab.
    Jason A likes this.
  4. Dot

    Dot Well-Known Member

    It is also important to note that the monitor tab only shows P/L for what is only currently open; not including any adjustments to the position. By going to the Account Statement and bringing over any actual adjustment/closing fills into the Analyze Tab, actual P/L will be reflected. I agree that Implied IV model is much closer to reality than Vol Smile model.
  5. Dan M

    Dan M Member

    Bill - to build on what Dot replied, to track actual P&L, you must set up your original trade and all adjustments in the Analyze tab using Add Simulated Trade and modeling each specific spread and price paid. If you have multiple trades to track, you can select Detach from the options in the menu button in upper right corner that will make a copy of the current Analyze tab and detach it as a separate window, then you can change the trades for the new trade that you are tracking.

    Sometimes you can lose track if you have checked off the latest adjustment or not in each window, and one way to always check if the Greeks you are seeing in the window match the actual is to check them against what is shown in the Monitor tab. Although the P&L is not accurate there once you make and adjustment, those greeks are always reflective of the current position. If they match what you are modeling in the Analyze tab window, then you are modeling everything correct (sometimes there are very slight differences between the 2 for whatever reason i don't know but the difference is very small).

    Also if you have multiple trades in one index, you can select Add Group from the menu on upper right side of the Position Statement in Monitor tab and then group the various option positions into trades (M3, Road Trip, etc) so you can see the Greeks for all options in those specific trade strategies only on the Monitor tab. Then when you execute a trade you select the Account and Group after you Confirm and Send in order to route that trade to the proper Group in the Monitor tab. However I have found that if you are trading the same option strikes in the different groups, TOS doesn't let you keep them separate in the different groups, it puts them together in one group or another, which then throws off the Greeks. A real issue if trade M3 and BB for example on RUT.

    I have found this fine to track my various trades without the use of 3rd party software, other than if you have too many windows with too much going on in each (eg, projected day steps), it takes a lot of RAM. However I am concerned about TOS projected T+0 outside ATM as has been often commented upon here, especially trading M3. (Is OV really what is needed, but doesn't it seems to give users fits?) Hope this helps.
  6. garyw

    garyw Well-Known Member

    Another approach; which I use, is to export the Account Statement, and process the Trade History section to "reconstruct" the cash flow for each campaign, then add that back to a Risk Graph plot of the current position. (not using TOS Analyze for this, however). This is a no-touch approach.
  7. Trader G

    Trader G Well-Known Member

    Make sure when you setup your trades in the sim tab that you back them up (they save as a txt file). TOS has a glitch that they are aware of but don't seem too concerned on fixing where your sim trades get deleted. This usually happens after updates but I have had it happen more frequently in the past few weeks. I now back up after every adjustment so I don't have to rebuild.
  8. Dan M

    Dan M Member

    Great point...yes i have lost those detached windows sometimes especially if your computer crashes and you don't do a proper TOS shutdown. To do so you select 'Save Workspace as' from the Setup gear icon in upper right on main page.
  9. Casey

    Casey Guest

    I tried to "bring over" my closed trades/adjustments from the Account Statement tab to the Analyze tab and was still not able to see the correct P/L on TOS. Is there something I am doing wrong? Any help would be greatly appreciated.
  10. Paul Demers

    Paul Demers Well-Known Member

    Hi Casey
    First question I have is how far off is the P/L? Understand that in the analyze tab TOS calculates the P/L where the intersection of the ATM price slice and the T-0 line meet and is not calculated using mid prices. This can lead to the P/L not matching the monitor tab at times. I monitor my trades with all sims including the initial trade and set the position and simulated trades section to hide positions rather than just importing the adjustments. As I go along I export the current trades to a text file that I can recall later in case TOS loses the sims during a shutdown. I find this makes it convenient if I have multiple trades as I can just load each one quickly for review and I can create any adjustments and save them to the text file as well so I do not have to build them every time.

    Hope this helps
  11. Dot

    Dot Well-Known Member

    I follow the exact same procedure as Paul outlines; once you get used to the process it becomes habit and works fine.
  12. Neil

    Neil Active Member

    FYI - If you lose your Simulated Trades or suspect you're missing some when looking at the Analyze Tab, Tim Pierson showed an easy way to reconstruct all of the trades in a given expiry cycle a few weeks ago in his Beginner and Small Account Trading Group. Here's a summary:

    Paul Demers likes this.
  13. status1

    status1 Well-Known Member

    Yes that works if you only trade at AMTD , but if you have other accounts than you still need to export the simulated trades I think I had about 3 different times that my simulated trades were deleted this year and I had no problems like this previously The most recent one was this weekend when it came up with an unexpected error and not only lost my trades but the platform was messed up to the point that it would always crash so I had to use an earlier backup that worked and than load the simulated trades back in
    Looks like I have to start saving my simulated trades more often now

    As far as the p/l I use the check boxes next to the trades to turn them on and off for the different accounts including AMTD which is only accurate until I make an adjustment after that I track it with the check boxes Also make sure that you have the price locked and keep in mind that the price does not include the commissions
  14. status1

    status1 Well-Known Member

    I got a reply from TOS from my most recent lost trades and supposedly they are working on a fix for this issue

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