Buying Options based on Stock Price and Exiting Based on % Option price changes in TOS

If you'd like to enter an option trade based on the underlying stock's price movement in thinkorswim, you can do so by specifying a Condition as part of your order.  Then, once you're in the option trade, TOS allows you to specify percentage offsets from the entry for the target and stop.  This video shows you how to set this up, as well as how to configure a template to make entries quicker.   It also shows you how to add an OCO to an existing order in case it wasn't set up at the entry.

IMPORTANT:  The video shows entries based on the Market Price and setting up the trade before the open.  Using a Market Price entry assures you get filled, but you will often get a better price than at Market if you can monitor it at the open and buy on a dip after the open.  So, you may want to try to get into the trade manually and then set the OCO exit targets and stops after you're in. (And yes, you can create an OCO-based template to help you set that up, similar to what's shown in the video but without the entry.)  If you have a target in mind, you might want to prioritize that target over a percentage gain on your entry because the target is chart-based and price may not go beyond that before pulling back.  If you're not able to get a good fill, you can always pass on the trade and await the next one. 

Here's another suggestion that you can use to prevent paying too much:  You can try to estimate a maximum that you're willing to pay for the option and use a limit order with that amount instead of entering at market.  This way, if it pulls back from the initial market price jump, you'll be able to enter perhaps lower than the market price.  You may not get into the trade, but you'll avoid paying too high of a price at market.  Be careful you don't enter late into the trade when it's already run and end up buying it as it's pulling back after hitting the target.  You could avoid this in some cases by only allowing the trade to work for the first few minutes the market is open by having the order canceled at a specific time, such as 3 minutes into the trading day, for example.  As you can see, trying to automate the entire trade has its challenges, and if you can monitor it live, you will probably get better results.  Make sure you know how to modify an existing order to make adjustments within your defined rules for the trade. 

Note that some platforms have a "replay" capability which allows you to practice trading using a replay of previous trading days' data and place orders as if it were happening live.  For example, Thinkorswim offers ThinkOnDemand to play back the market as if it was a DVR.  You can replay the previous day (or before) and practice the trade open multiple times this way, as if it's real-time, to hone your trade entry skills.