Not Getting Filled, Just A Sleepy Day?

Arnie - A couple good rules of thumb for trading liquid options:

Only trade options on stocks/etfs w/ average 20 day vol of min 1 million.

Your position shouldn't be more than 10% of the open interest for that strike.

You can check the historical option volume using TOS (click "analyze" tab then click "thinkback" then enter ticker then in the upper right hand corner adjust the date using the calendar icon and select a contract expiry to view). This will let you know how much volume there is. A lot of times I've thought about entering a trade then checked out the volume only to discover there wasn't a single trade for my month/strike for the past 2 weeks (or less than 10 contracts).

Don't be deceived by a tight bid ask spread on illiquid options. It might be 7.00x7.70 but as soon as you place your order the marker makers auto adjust another 10% away from you (personal experience on this one). Also market makers are only required to sell 10 contracts at each strike (correct if I'm wrong anyone) so just b/c the offer is 7.70 doesn't mean you can place a limit order to buy 100 at 7.70.

Hope this helps. Asking questions is how beginners learn and we were all there and we're still learning.
 
Quote from FrankSlaughtery:

Also market makers are only required to sell 10 contracts at each strike (correct if I'm wrong anyone)
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Just wondering if anyone can confirm this? I trade SPX and NDX (although SPX is a different animal) quite a bit and even when TOS is showing size of 50X50 rarely can I ever executed on a single order at that size unless the UL moves against me. So I end up trying 5 or 10 contracts at a time which is extremely annoying if I am trying to put on a large order but I guess that’s just the nature of the beast.
 
Quote from uptickk:

Just wondering if anyone can confirm this? I trade SPX and NDX (although SPX is a different animal) quite a bit and even when TOS is showing size of 50X50 rarely can I ever executed on a single order at that size unless the UL moves against me. So I end up trying 5 or 10 contracts at a time which is extremely annoying if I am trying to put on a large order but I guess that’s just the nature of the beast.
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If it's showing 50/50 you'll get filled, but again, only if you take the natural.
 
Quote from Epic:

If it's showing 50/50 you'll get filled, but again, only if you take the natural.
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Good point about the natural. I work my orders for better fills.
 
I agree that you should work your orders. That's why it's a huge perk not having to pay modify/cancel fees like at ib although you can get credits on fills. Here's a tip that has saved me a lot of money over the years re order entry (all caps for emphasis) - READ EVERY ORDER OUT LOUD!. I can't tell you how many times I was about to submit an order then I read it outloud and realized something was wrong w/ the order (quantity 100 instead of 10 cars:eek: ). Since I've started doing this I have NEVER entered an order incorrectly. Just paying it forward to you guys b/c I don't want you to look at your position tab and it says something completely different than what you thought you were trading.
 
Quote from FrankSlaughtery:...READ EVERY ORDER OUT LOUD!...
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Hey hey, there's one thing I do right!

I read it several times to try and make sure it's what I want to do.
 
Quote from FrankSlaughtery:

READ EVERY ORDER OUT LOUD
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That's a good idea.

I place a lot of orders somehwhat away from the market. I find that if I enter the price first, then enter the # of shares and then double check the price again, I rarely screw up.

If you're trading away from the natural, you have to be very careful in the pre/post market (equities with wide spreads) and anytime price straddles an even dollar amount - eg $27.90 x $28.05). It may not sound like something you'd do but if careless, trying to trade near the B or A can result in an order placed $1 higher (or lower if selling). In a fast marked or if trading rapidly, you don't want to be the that guy :). It's a beautiful thing when dumb money comes your way.
 
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