SteadyOptions is an options trading forum where you can find solutions from top options traders. Join Us!

We’ve all been there… researching options strategies and unable to find the answers we’re looking for. SteadyOptions has your solution.

zeon

Stop Limit Order on Option positions

Recommended Posts

Does anyone use stop limit orders on option positions I know stop loss orders can be bad with options because they can turn into 

market orders which can be bad news on options at times. I was just thinking if you put a stop limit order on your option positions the market maker 

if the price is low enough the market maker may try and push the option price down for the sole purpose of getting your stop limit exectuted.  

What sort of  options do people use to manage there option holdings and potentially sell if things go south manually monitoring your option position is one may are there other ways that people use with success without being taken advantage of my the market makers ?

 

 

 

 

 

 

Share this post


Link to post
Share on other sites

Thanks for the advice.  What about putting a limit order for a gain early ?  Or should you wait until the option price gets close to your target before entering a limit order

how much option volume  does a stock need to have to be liquid?  

Share this post


Link to post
Share on other sites

Generally speaking, placing limit orders to book gains is fine, but it also depends on strategy. I would not recommend placing GTC orders on straddles or RICs because if the stock gaps at the open, you might miss some of the gains. On other strategies it is perfectly fine and even recommended.

Regarding volume - there are no hard numbers, but usually liquid stocks have very tight options spreads, and also decent OI.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account. It's easy and free!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.