Should you chase options to get filled?

a529612 · Jun 23, 2006

Do you usually pay up to get filled, say you put in a limit to buy open @ 4 but the ask is 4.1? Now the ask has moved up to 4.5 and looks like I missed an opportunity by being stingy on the 0.1. Is it a big no to chase options like that?

Crucis · Jun 23, 2006

The price oscillates during the day. Why chase an option when if you wait, the price can come back to you.

WHen I first started trading, I'd chase a price. No more. Good way to lose money buying more than you need.

krazykarl · Jun 23, 2006

Quote from Crucis:

The price oscillates during the day. Why chase an option when if you wait, the price can come back to you.

WHen I first started trading, I'd chase a price. No more. Good way to lose money buying more than you need.

words to live by.

rosy · Jun 23, 2006

you can chat me on yahoo when you want to get a fill in the middle of the shown bid/offer. for example, you want to buy XYZ JUL50 call currently quoted at 2.7/3.2
then chat me and I will try to post a 3.0 offer for you to hit.

my ID is "makebidoffer"

a529612 · Jun 23, 2006

But how about if you try to scalp the day high or day low? Those prices only occur once a day provided there is no breakout or crash.

scriabinop23 · Jun 23, 2006

Quote from a529612:

But how about if you try to scalp the day high or day low? Those prices only occur once a day provided there is no breakout or crash.

hah.. if you only knew the day hi and low were happening when they do, you'd have the key to unlimited wealth.

Bitstream · Jun 23, 2006

Quote from rosy:

you can chat me on yahoo when you want to get a fill in the middle of the shown bid/offer. for example, you want to buy XYZ JUL50 call currently quoted at 2.7/3.2
then chat me and I will try to post a 3.0 offer for you to hit.

my ID is "makebidoffer"

good to know

Li Ka Shing · Jun 23, 2006

Quote from a529612:

Do you usually pay up to get filled, say you put in a limit to buy open @ 4 but the ask is 4.1? Now the ask has moved up to 4.5 and looks like I missed an opportunity by being stingy on the 0.1. Is it a big no to chase options like that?

I think this would depend very much on your time frame and the extent of the trend you are trying to catch. I think it's the same consideration like in stocks or futures. If there is a strong trend, it's ok to chase up the limit since there is more of the trend coming. But for choppy short trends it's a bad idea to chase up the limit. So, whether a move/ breakout you are trying to join is short-lived or not. Personally I find it more susceptible to psychological problems, so when I miss a move I try to check myself and be more careful before chasing up. And when it's moving, it tends to have wider bid-ask spread than when it's calm/ consolidating, so it might be better to wait for a slight pullback or a calm basing period first to enter. The bid-ask spread would improve a bit.

zxcv1fu · Jun 23, 2006

I will never place an order to buy orders at open, The price will not be right. Should give some time to establish stable option price first.

I's place order at mid-price & watch the stock & option time & sales to decide if I want to move my price. Thinkorswim strongly suggests NEVER chase, the entry price has to be right to have any edge.

a529612 · Jun 23, 2006

Quote from zxcv1fu:

I will never place an order to buy orders at open, The price will not be right. Should give some time to establish stable option price first.

I's place order at mid-price & watch the stock & option time & sales to decide if I want to move my price. Thinkorswim strongly suggests NEVER chase, the entry price has to be right to have any edge.

No, I mean buy to open the position, not buy at open.