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Mervin,
Using options to replace stops may in fact be an excellent idea. Using MOC
order is the purest form of suicide I know. MOC allows the traders to
close the series at any price they may need(within reason)and because the
order has to come in well prior to the close they lean on your order. You
in effect have given them a stop on their position and you are doing it in
a volatile issue or you wouldn't be concerned about the stop in the first
place. Use a limit order and make certain you know what your broker's
cutoff times are.
Mervin Yeung wrote:
> Hi RTs,
>
> I am trying to use options to replace stops. I worry about the
> liquidity. I know the close is usually the most liquid of the day. I
> wonder if I use Market on Close Order to buy calls or puts right at the
> close, is it a good way?
>
> Thanks in advance!
>
> Mervin
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