Sheridan Options Mentoring Blog |  |
| The Markets are Melting Down this morning Posted: 15 Mar 2011 06:30 AM PDT 
So what does that mean to an option trader? You’ll experience fast moving markets today. Bid/ask spreads will widen and it will be difficult to get filled at the mid-price. Volume will be heavy and firms with help desks will possibly have delays for you to speak to someone if you need help. With heavy volume, broker platforms will struggle to keep up. You may see transient errors in account buying power, margins etc.
- The most important thing to know is if you need to close a short option now, use market orders. Limit orders don’t work very well in fast markets. Just bite the bullet and stop your bleeding. - Don’t chase a bad position. If you’re at or past your maximum loss, don’t fool around trying to save your position. You could easily take a massive hit to your account that will take a long time to recover. Don’t do it. Honor your max loss and get out. - Don’t react in a panic mode. You seldom make good trading decisions under stress. Try to neutralize your positions to give you time to think, and the market time to settle down. - We use probabilities for income type types. Panic markets aren’t normal and we probably shouldn’t be trading during them unless you like risk. Consider reducing your positions or going flat until the market settles down. In summary Just be careful. Don’t rush. Don’t make decision under stress. Don’t chase bad trades. Honor your max loss and use market orders to close positions if you absolutely have to close something today. |
| You are subscribed to email updates from Sheridan Options Mentoring Blog To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment