BillParticipantJanuary 12, 2021 at 12:33 PMPost count: 9
Hey Sean, how’s it going? I think I’m asking the right question, how liquid is the options market? You’ve said to make sure we buy contracts with high open interest but when I go to sell to close my contracts with a market order am I assured that sell order will be filled regardless of the number of contracts I’m selling?Sean HymanKeymasterJanuary 12, 2021 at 12:50 PMPost count: 5597
There’s more option volume now than there’s ever been in option market history. HOWEVER, just like with stocks, there are still illiquid, low volume contracts out there.
How do you avoid them? Start with large, well known companies. Trade contracts that have a high Open Interest.
You’d want to use limit orders with options rather than market orders. Usually the open interest in liquid contracts will be far larger than the number of contracts a regular person can normally buy/sell.
With every asset, there’s no an unlimited amount that can be sold at that price, even with stocks. Options are no different. Buying options of huge companies with large open interest, you should have no problem selling/closing. I’ve never experienced that in option trading. So that’s how rare it would be, to have problems closing.BillParticipantJanuary 12, 2021 at 12:56 PMPost count: 9
Thank you sir, I appreciate your help. Hope you have great day.AphroditusParticipantJanuary 12, 2021 at 1:09 PMPost count: 65
Another options question; if options aren’t profitable prior to expiring is it worth exercising those options and then using an averaging down strategy or long term holding until the position is profitable?Sean HymanModeratorJanuary 12, 2021 at 1:43 PMPost count: 3256
You don’t want to exercise. That means, take ownership of the shares at the strike price. That requires far more capital that’s either not in an LI pick or would overweight an Lzi pick.
Some options will go worthless. That’s a given. It’s about gaining a statistical edge over time, which is what my option ebook and reports are about. Long-term edges.
The way you handle losses is that you risk a small percentage of your overall amount you have allocated to options. 1-5% max. 1-2% is more ideal.Jeff CrowhurstParticipantJanuary 12, 2021 at 4:50 PMPost count: 40
Have you given any more thought to adding an Options service like this Stock (LI) service? I thought I saw your interest in one of the other forum threads. I have the Options Demystified E-Book but wondered if you would build us out a portfolio and give guidance like you do here in LI.
JeffSean HymanKeymasterJanuary 12, 2021 at 4:57 PMPost count: 5597
As soon as my web guys have it done, there will be a “Stock Insights” section and an “Option Insights” section. It won’t be a recommendation service like LI. it won’t be me giving recommendations. It would be me coachiing/guiding people about stocks/options that they’re interested in and giving insights on them. Whether they may be solid or not. Better times to buy/sell. Better option contracts to choose and why, etc. Giving people a better edge than they’d likely have on their own.
As soon as the web guys get all of that coded, I’m ready to launch those two sections.Jeff CrowhurstParticipantJanuary 12, 2021 at 5:13 PMPost count: 40
Will you be charging for that service?Sean HymanModeratorJanuary 12, 2021 at 5:17 PMPost count: 3256
Yes. For each. It’s a way for me to finally monetize the knowledge I’ve been giving away for free for the past year, that people have certainly profited from.Jeff CrowhurstParticipantJanuary 12, 2021 at 6:39 PMPost count: 40
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