zeon 2 Report post Posted January 23, 2019 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
Kim 8,035 Report post Posted January 23, 2019 I wouldn't do any hard stop limit orders, especially on less liquid options. If you want to implement a stop loss, I would do a mental stop loss. Share this post Link to post Share on other sites
zeon 2 Report post Posted January 23, 2019 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
Kim 8,035 Report post Posted January 23, 2019 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
