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It has been my experience that with options your stop needs to be on the
underlying, or the bid and ask side of the option as most brokers will not
exacuite a GTC until the option trades at your stop price. That trade may not
take place until the price is well below your desired stop. As options may not
trade at each bid and ask. Or not for days even as in AOL leaps And the bid and
ask will move well away from you with disastrous results. We day trade OEX
options and manually place stops using the bid side as worse case senario,
always discuss this with your broker.
____________________Reply Separator____________________
Subject: GTC Orders
Author: Cab Vinton
Date: 10/8/98 7:46 PM
Some questions about the mechanics of GTC orders:
I have a position in AOL Jan 2000 puts <G> and am using a GTC limit
order as an exit.
Since many LEAPS don't trade very actively (average daily vol < 10), I'm
wondering how brokers approach these types of orders.
How often do they put your order out there every day?
How close does your exit have to be to the last trade before they'll go
fishing on your behalf?
To what extent is their diligence influenced by fast markets (such as
this morning)?
Will they pay more attention to the order if you're trading big size, or
are a frequent trader?
Do brokers ever need friendly reminders?
Any guidance gratefully received.
Thanks,
Cab Vinton
cvinton@xxxxxxxxxxxxxx
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