Option Trading Article of the Week
Option Trading - How I Trade Options - Liquidity and Implied Volatility
Posted by Pete Stolcers on August 29
Today's option trading blog concludes my series - How I Trade Options. To date, I've found the trade and quantified my opinion. Here's how the liquidity and implied volatility of the options influences my strategy selection. One of the advantages of being an individual trader is that I don't have to worry about "size". Often, 10 contracts is a large enough position and my order won't "drive" the market. As a newsletter writer or an institutional trader, I need to make sure the liquidity can support hundreds of contracts. I measure size based on the bid/ask spread and the respective…Read the rest of Option Trading - How I Trade Options - Liquidity and Implied Volatility


