When to Place Option orders ( When the Market is Closed ) ....

M

md2324

Is there any drawback to putting in an order when the Market is cosed ( at night and or pre-market ) , as long as you place a Limit Order as well as a Stop order ..... Both at the sametime that you place the trade ?

And I assume that the order won't get filled during these hours, as the market is closed ?
Unless that which happens in the Asia and European markets could cause yur order to get filled ?

I ask this mainly because .... sometimes I am not at home to where I can place my option trades ( whether that be regular Long call and put trades, Verticals and Ratio Backspreads ).

Just wondering if there is anything I need to be aware of and or cautious of .... .for when I go to place a trade when the US market is closed.

It seems like there's nothing to worry about , as you can't lose more than the price you paid for the option ( if buying just a regular Call or Put option ), and then a Spread has a capped risk and profit , so nothing to worry about then ?

Thanks for the help
 
IMO ...... Too impractical to place option orders when the market is closed. But if you have no choice then you have to play the hand you are dealt and make the best of the situation.



:)
 
Actually thats wrong. if you are long an option and its 1 penny ITM you will get automatic exercise by the OCC. You need to call your broker before market ends and give explicit no exercise instruction.
 
There is technically nothing wrong with placing orders when the market is closed. In most cases your broker will hold the orders and send them to the exchange when it opens.

However, there is significant risk because of the events (geopolitical, news, natural disasters, another Greece bailout, etc) that can move the markets significantly between the time you place your orders and the exchange opening.

If you have to do that - I would recommend looking at conditional orders and setting rules carefully. Platforms like ThinkOrwim and Interactive Brokers support conditional orders where you can set pretty sophisticated rules such as :where the underlying or market index should be , various technical indicators, etc.. the rules have to be satisfied for the order to become active.
 
Very impractical. On some of my 2 week to 1 month trades, the days execution price can be as much as 20% of expected profits. You are limited to setups with long time frames. A month and more.

Spread orders need baby sitting, which is what I hate about options trading.

I wouldn't execute orders like that for less than a 90 day setup. Maybe 30 days for naked options that trade ATM. I would rather swing the underlying products.
 
You must log in or register to reply here.
Back
Top