Discount Brokerage with Option Stop Loss
Lap Wah Lee
So far, I have found, Etrade, Mr. Stock, and MyDiscountBroker.com.
Anyone else?
Also, who has the best options quote chain? The best I have seen so
far is Dreyfus which is very concise. Unfortunately they don't update
in real-time (I don't believe many do).
rfi...@ibm.net
stocks all the time and they work pretty well. But on an option?
What you are saying is "I am willing to sell some thing that is currently
trading at, say, $4.00 for $3.00. Now if i'm the market maker, that's a
temptation to drive the option down to $3.00, hit your stop, immediatley
returning to $4.00. IMHO i don't trust the market to watch out for my best
interests, even tho i am trying to limit my loss exposure. After all many
options are thinly traded!
If others have a different take on this, pls speak up and i will reconsider.
Lap Wah Lee wrote in message
<366aa3e4....@netnews.worldnet.att.net>...
Arnold Anderson
short term trade such as day trading, rather it is
a bet on the direction you perceive the stock will
move in the near term, then you must watch it and
take appropriate action. As such I also believe
stop losses are not going to do what you want, I
have had options price change directions many
times, you have to use your instincts.
Arnold
Lap Wah Lee
Well, I wouldn't do a stop loss on options with low volume. In fact,
I would generally stay away from those options because the spread
might be unrealistic. But I don't think it would be a problem with
the heavily traded stocks like MSFT, AOL, etc.
Lap Wah Lee
In that sense, then options are short-term just like day-trading. If
I buy a ATM MSFT call for a $10 premium and the stock price move just
$5 lower, it will probably stop me out of my position because the $10
premium might lose $1/$2 in value very quickly. If the stock is going
against you at the moment, you should be getting out, no matter if it
will recover in the next few days. Better to lose a point now, buy
later at a lower premium and then wait for the market to recover. I
absolutely agree that with options, you need to monitor the stock
almost hour by hour. If you do that why the stop loss, well, it might
be more a mental trigger than anything else.
Back to the other guy's point, if a MM really did try to push the
option price down to $3, that presents a real bargain for others to
capitalize on. In a heavily traded option, it would be more
detrimental to the MM to have to sell at that price assuming the
spread were reasonable.
On Fri, 25 Dec 1998 17:56:15 -0500, Arnold Anderson
<arn...@geeky1.ebtech.net> wrote:
>I believe that options trading is not in fact a
>short term trade such as day trading, rather it is
>a bet on the direction you perceive the stock will
>move in the near term, then you must watch it and
>take appropriate action. As such I also believe
>stop losses are not going to do what you want, I
>have had options price change directions many
>times, you have to use your instincts.
>
>Arnold
>