One of forum member commented that he could not get filled when he wanted to close his position. He was very upset since he got quite a big loss since he could not cover his position fast.
Later, I found that he traded stock that trade very thinly. During volatile market like this, it is very important to find stocks that very liquid. If you used to trade with volume stock above 1 million shares, you have to seek stock with volume more than 3 million shares. Liquidity is one main important keys on options trading in volatile market. You have to ensure that bid-ask very tight so you avoid any slippage. Bigger spread means you reduce your profitability and this will not make you around very long to trade on this situation.
So, consider this advise, look for LIQUIDITY with the underlying assets that you trade, especially on this bear market/volatile market.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment