Swing Trading Options - Market or Limit orders?

Quote from inactionzip54:

If the bid ask is 20 cents wide and you are trading options intraday good luck using market orders.

No offense, if you think market orders are viable then it's pretty clear you have no idea what you are doing.
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  • The OP hasn't stated the strike they are interested in. But I see bid/ask as low as 2 cents.
  • SPY option chain http://finance.yahoo.com/q/op?s=SPY+Options
  • Limit orders in between a bid/ask of 20 cents have a good chance of going unfilled, the OP has to decided how important a fill is to them. I'm sure a few unfilled limit orders will get them thinking about using market orders instead.
  • Market orders will get filled instantly, that is a big plus. I have never been filled at a worst price than the quotes but I have been filled at a better price.
  • Any losses in the position will have nothing to do with using market orders instead of limit orders.

:)



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Would you want to play around with limit orders and try and save 1 cent on SPY calls today? Or would you go with market orders and get the job done? :)

actionzip54 ..... I don't see how you get "slaughtered by the bid ask" with market orders. You want to try and save a penny at the risk of not getting a fill? That is "penny wise pound foolish". :)
 
Quote from actionzip54:

If the bid ask is 20 cents wide and you are trading options intraday good luck using market orders.

No offense, if you think market orders are viable then it's pretty clear you have no idea what you are doing.
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Why would you day trade a security that has a 40 cent delta adjusted (assuming atm) bid offer unless that bid offer was meaningless to the notional?
 
Quote from newwurldmn:

Why would you day trade a security that has a 40 cent delta adjusted (assuming atm) bid offer unless that bid offer was meaningless to the notional?
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Judging by the OP I would assume that he/she hasn't thought of that. He simply asked if, "I'm day trading options should I use market orders?". Obviously if he is trading SPY it isn't that relevant but if he is trading spreads or any less liquid markets it is going to make a huge difference. I can also go ahead and assure anyone that if a market gets moving fast and you are using market orders with any kind of size you are going to get some pretty horrible fills. Yes, I guess if OP sticks only to very liquid markets, never trades spreads, never trades the open or close, sticks only to atm options or near atm, and generally hates markets with any kind of extreme intraday volatility he should use all market orders.

I'm done with this thread as I don't feel like spending my time dealing with puerile posters like fxforex.
 
Quote from actionzip54:

Yes, I guess if OP sticks only to very liquid markets, never trades spreads, never trades the open or close, sticks only to atm options or near atm, and generally hates markets with any kind of extreme intraday volatility he should use all market orders.
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bingo!
 
Quote from actionzip54:

Judging by the OP I would assume that he/she hasn't thought of that. He simply asked if, "I'm day trading options should I use market orders?". Obviously if he is trading SPY it isn't that relevant but if he is trading spreads or any less liquid markets it is going to make a huge difference. I can also go ahead and assure anyone that if a market gets moving fast and you are using market orders with any kind of size you are going to get some pretty horrible fills. Yes, I guess if OP sticks only to very liquid markets, never trades spreads, never trades the open or close, sticks only to atm options or near atm, and generally hates markets with any kind of extreme intraday volatility he should use all market orders.

I'm done with this thread as I don't feel like spending my time dealing with puerile posters like fxforex.
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Fair points (both of them).

Personally I disagree with you. But i also wouldnt be trading a strategy where bid offer and commissions are meaningful as a percentage of pnl.

And yes, I've had some pretty shitty fills with market orders.

A marketable limit order is a decent compromise.
 
Quote from newwurldmn:

Fair points (both of them).

Personally I disagree with you. But i also wouldnt be trading a strategy where bid offer and commissions are meaningful as a percentage of pnl.

And yes, I've had some pretty shitty fills with market orders.

A marketable limit order is a decent compromise.
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We can agree to disagree. :)

I also want to make it clear that I didn't have a problem with your post, only fxforex. I can handle someone disagreeing with me but there is no reason to be rude or know it all. Thanks for being civil.
 
I would also hazard to say that if OP is going to be doing intraday trading he should just stick to trading the underlying. I can't see very many strategies where trading ATM spy options would have a benefit over trading ES or SPY equity. I mean options are so much more than just a pure bet on delta that it doesn't make much sense when you have better options like ES.

For example, if OP was buying calls in Mar/Apr 09 even intraday I'm sure there would have been days he was right on direction but took a huge hit in vega that would have negated any directional edge he had.
 
Quote from actionzip54:
I can also go ahead and assure anyone that if a market gets moving fast and you are using market orders with any kind of size you are going to get some pretty horrible fills
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  • I would reword that and state: "you might get some pretty horrible fills"
  • And what does "horrible" mean? That is a very ambiguous term.

Again this is a situation on how important the trade is. An opening limit order could leave you behind if it isn't filled, a closing limit order might cut into your profits or add to your loss if it isn't filled. Market orders eliminate any potential problems with unfilled limit orders. :)

Quote from actionzip54:
For example, if OP was buying calls in Mar/Apr 09 even intraday I'm sure there would have been days he was right on direction but took a huge hit in vega that would have negated any directional edge he had.
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LOL. That's 4 1/2 years ago, lets keep it current. :)
 
Quote from actionzip54:

I would also hazard to say that if OP is going to be doing intraday trading he should just stick to trading the underlying.
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+1
 
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