Hi Option traders, since the bid and ask spread could be wide, submitting a market order could end up with very undesirable result. How do you guys ensure your order execution without using a market order?
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Options traders seek alternative order execution methods to avoid undesirable market order outcomes.
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Option traders, how do you ensure your order execution without using market order?
Kevin Du | January 2022
Hi Option traders, since the bid and ask spread could be wide, submitting a market order could end up with very undesirable result. How do you guys ensure your order execution without using a market order?
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Mak K INVESTOR
Hi Kevin Du ,
You might want to try looking at the bid and ask and send out orders at mid price or whatever range you deem to be acceptable but have the orders either be limit orders with quick expiry or something that achieves similar results. So basically look at bid and ask, decide how much higher than the ask you would be willing to buy at and then send out limit orders at that price but make the order expire quickly. Of course this is just a very rough explanation of it and not financial advice neither.
You can check these links, maybe the will help you;
https://www.quantconnect.com/forum/discussion/9798/accessing-option-contract-bid-price-after-contract-purchase/p1
https://www.quantconnect.com/forum/discussion/6981/does-lean-engine-check-for-bid-ask-size-during-backtesting-of-options/p1
Thanks!
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