Industry Classification

When creating and managing your portfolio, you might want to determine main revenue sources of companies in whose stocks you are willing to invest. In order to do that and also make sure your portfolio is properly diversified (or, on the contrary, sticks to a single field of industry), feel free to use industry classification present in several features of thinkorswim®. This classification complies with the Global Industry Classification Standard (GICS®) so that you can learn right away where on the industry map a particular stock finds itself.

The highest level of the hierarchy is sector; as of November 2014, there are ten of them. Sectors are broken into industries whose number reaches 67. Finally, there are 156 sub-industries that define the lowest hierarchy level.

An example of industry classification: a symbol of a company of the Computer Hardware sub-industry will belong to the Computers & Peripherals industry and the Information Technology sector.

Where to find it:

1. Watch lists

When viewing any of your watch lists, you can add an industry classification column to it. This will allow you to see which industry classification units the instruments in that watch list belong to. In order to do that, right-click the header of the watch list and choose Customize... In the Available Items section of the dialog window, choose desirable classification units (Sector, Industry, Sub-Industry) and click Add Item(s). After clicking OK, your watch list will display the desired columns.

You can also view a watch list of instruments that belong to the same sector, industry, or sub-industry. In order to do that, click the "gear" button above a watch list and choose By industry in the menu. Choose a sector, then an industry and then a sub-industry.

2. Position Statement

You can group your positions based on which sectors they belong to. In order to do that, click the Show actions button on the right of the table header and choose Group symbols by -> Sector.

3. Stock Hacker

You can sort your results of the Stock Hacker search based on which sector, industry, or sub-industry they belong to. In order to do that, right-click the header of the Search Results table and choose Customize... In the Available Items section of the dialog window, choose desirable classification units (Sector, Industry, Sub-Industry) and click Add Item(s). After clicking OK, the Search Results table will display respective columns. In order to sort results by any of the classification items, click the header of the respective column.

Note that you can also narrow your search to stocks that belong to the same sector, industry, or sub-industry. In order to do that, use the Scan in drop-down list before performing the search. In this list, choose By industry, then specify a desired sector, industry, or sub-industry.   

4. Heat Map

When viewing a Heat Map for a watch list, you can restrict it to instruments that belong to the same sector, industry, or sub-industry. In order to do that, click on the triangle button before the name of the watch list you would like to view. This will expand the list of sectors present in the watch list.  Likewise, clicking on triangles before sector names will expand lists of available industries. Finally, if you prefer to narrow the Heat Map to a certain sub-industry, click on the triangle before the corresponding industry item and select the desired sub-industry from the expanded list. Note that a watch list only contains a certain number of instruments, thus your desired classification item may or may not be present in it.

5. Fundamentals

The Fundamentals functionality enables you to research company fundamentals based on the industry they belong to. Clicking on any of the present industries will open a list of instruments that belong to it. Choose an instrument from this list to view its fundamentals.

The Today’ Options Statistics section displays the detailed options data. To view the data, click on the V-shaped icon  before the section title.

You can find the following kinds of data in Today’ Options Statistics:

1. The first section to the left displays a breakdown of the chosen security’s volatility measurements. There are two data points:

  • IV (Implied Volatility) is a measure of market sentiment regarding the security’s potential movement. In general, the higher the implied volatility, the higher the option’s premium.
  • HV (historical volatility) attempts to measure a security’s potential price movement based upon the ranges of price movement a security has historically shown.

The first section displays the 52-week high and low of both of these volatility measurements as well as the percentile of volatility relative to that range.

The final value in this section is the VWAP, which stands for Volume Weighted Average Price. VWAP is a measure of the underlying’s price based on the number of shares or contracts traded at different prices.

2. The area in the center is Trade Analysis. This collates the records of all options trades recorded for the current date and breaks them down into useful classifications.

The three different colored columns represent sums of the rows for Calls, Puts, and the aggregated total. The following rows are shown:

  • Total volume: The aggregate volume of each of these three columns for the current trading day.
  • Traded at BID or below: The total number of contracts traded at or below the bid price at the time of their execution.
  • % of Total: The percentage of “Traded at BID or below” relative to the total number of calls, puts, or all options traded.
  • Traded at ASK or above: The total number of contracts traded at or above the ask price at the time of their execution.
  • % of Total: The percentage of “Traded at ASK or above” relative to the total number of calls, puts, or all options traded.
  • Between the Market: The total number of contracts traded at a price between the quoted bid and ask at the time of execution.
  • %of total: The percentage of contracts traded “between the market” relative to the total number of calls, puts, or all options traded.
  • Delta between: Collective deltas of all options at the time they were traded divided into quintiles. To simplify the display, the deltas of both calls and puts are shown as their absolute value for convenience if you are comparing the delta values in the puts column to the puts section of the option chain.
    Note: A negative delta on the chain is equivalent to the positive value on the options statistics page.

3. The final section on the far right contains data based on Sizzle Index. Sizzle Index is a ratio of the current day’s volume for all options on the underlying against the average of those options previous five days’ volume.

In addition to the Sizzle Index, the following values are displayed in this section:

  • Call and Put Sizzle Indices: These indices measure solely the volumes of that underlying’s calls and puts.
  • Volatility sizzle: This index measures the underlying’s current Volatility Index against the average of the past five days.
  • Stock Sizzle: This index measures the underlying’s trading volume against the average of the past five days.
  • Put-Call ratio: The ratio of the underlying’s put volume to its call volume.