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The way I look at it is that one day one way or the other usually makes the
difference in the premium academic anyway. When you can loose $1500 dollars
or more on one bad day it all seems cheap anyway.
I use mostly limit orders and I expect to take a little hit most of the time
when I buy. Don't misunderstand, I always bid low when buying. I don't
always buy the best insurance (in other words a delta weighted policy) it
depends on the trade but I sometimes buy two out of the money options (one
or two strikes out). The commissions are a problem but again they seem cheap
if the volatility pops. It's not infallible but it works for those of us
that are more risk adverse. At least it allows me to keep my composure. I
would actually panic when trading naked. I felt like I was trapped and that
there was little I could do about it.
Brent
-----Original Message-----
From: swp <swp@xxxxxxxxxx>
To: BrentinUtahsDixie <brente@xxxxxxxxxxxx>
Cc: Real Traders Forum <realtraders@xxxxxxxxxxxx>
Date: Monday, June 21, 1999 8:10 PM
Subject: Re: OPTN: Market on Close
>So what kind of order do all you folks use? IF it is a limit order, away
>from the market, you probably will get filled at the wide bid/ask spread
>anyway. The only way to really avoid that, I've often found, is to get a
>bid/ask when the market is quiet and then try getting a price towards
>the middle of that range on an immediate or FOK (fill or kill) basis.
>
>The great prob I've found with using options for stops is just as what
>everybody is alluding to: The spreads are much wider than the futures.
>And remember, for a proper hedge, it needs to be delta weighted, so you
>need to buy/sell more options contracts than futures, making your
>brokerage higher too.
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