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kevin sheen wrote:
> Today I tried to sell call options on Heating Oil and found great difficulty to get filled with nice price.
> I'll try to do that again,,,,but I need some help on placing orders.
> Attatched a screen shot of the quote page of Heating Oil.
> I'll try to sell June Heating Oil call 4800. As you can see,,,last price was 30pts.
> But looking at Bid/Ask price,,,there's too much of difference. How can I get paid with best price?
> I can't bid nor offer,,,,since I'm not on the floor. I can't place just a limit order since it might not get filled.
> I wonder how any experienced option traders buy or sell.
> Any comments are welcomed....
Kevin,
I think the object of successful trading is to not to just get in but get into the market at a favorable price that
represents a favorable risk reward situation.. The time to be aggressive about trading is when you are wrong and need to
get out. Then you can consider using a market order. Othewise, and especially with thinly traded options, you should
always use a limit order to enter the market.
Secondly, unless this is part of a spread or hedge, I don't understand why you would bother writing a call option on
a depressed market for 30 points. Best case is that you will get to keep 30 points minus comissions. Worse case is that
THEY will get to keep your house. This illustrates that most traders trader for too small a profit margin. 30 points is
what I may make or lose because I missed my entry by going to the refridgerator. Heating Oil often swings 2000 points or
more. You should be thinking in terms of how you can make at least 300 points if not more. For example, I have been
trading crude oil this year and have a 450 point profit goal. By trading for a large profit margin, I trade much less,
trade small positions and therefore I don't over trade. So, I save alot of money on brokerage commissions, quote
services (I use delayed), and stress related health costs. I feel alot happier and healthier trading this way. I can
wait weeks or months for my goals to be met. Meanwhile, I can be productive in other areas of my life. I don't think
that I could be so relaxed being naked short a nearby heating oil optoin for 30 points.
Regards,
Norman
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