I just saw an ad on TV talking about TDAmeritrade’s new options trading tool. They had some hipster guy walking in with a bag full of groceries in his hand. He was very serious and lecturing about the need for strategy in trading. They then cut away to some other beautiful people talking about keeping up with the market first thing in the morning and watching some blinky lights on the computer monitor giving them information.

One lady looked intensely at a “heat map” that showed where the money was going that day. I thought she was playing Tetris but the commercial says this is part of the trading strategy. It looked more like a video slot machine, which I suppose it actually is in some respects, but it certainly wasn’t investing.

Well, it was just too much to bear so I took a quick look at what other pretty charts their software can make from their website above.

The “Heat Map” feature. Here you can see where the hot money for the day is going in the market so you can be the chump jumping in after everyone else and be left holding the bag:

TDAmeritrade's "Heat Map"

This chart is a representation of your money being sucked down a black hole by doing options trading:

Options Black Hole

The website says: “See a clearer picture of the potential profit or loss of your options trades.” Is this chart clear to you:

Options Huh?

Here’s a chart they left out:

Bad Option

That’s my projected returns on $100 for most options traders.

If the information in TDAmeritrade’s “heat map” and other technical indicators was worth anything, why would they be telling it to you? Why wouldn’t they use their secret insight into the markets and make a killing themselves? They’ll just have to be happy with their per-trade commissions while their options trading customers are pulling down the big bucks. I guess they’re just being nice guys.

I know people who lost their life savings trading options. Stay far away from this stuff.

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