Don’t! That’s right, if you decide that you need to purchase options on any index, stock, ETF or whatever, hold off your buying until you see what is happening with the market. Why? There are four major factors involved with buying options at the market’s opening bell: Oscillation of the market Overnight orders Market Makers Open Interest – liquidity – bid/ask spread We’ll talk about each of these in order. Oscillations – The ups and downs of the markets are difficult to predict. Let’s say that you put in an order to buy 10 at the money (ATM) calls on XYZ the night before. That means that your online broker will purchase your calls at the market price at the open of the market. If something has happened the night before, such as rioting in Egypt, the market will likely correct downwardly in the United States. This happened…

January 29th, 2011
Money maker
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