People regularly write in to ask about how to get orders filled. Here are some general guidelines about how we handle order entry and execution:
- The limit price we publish on any given trade is usually at the middle point between the bid and ask, plus or minus a few cents in order to facilitate the fill.
- We watch the order on several retail platforms in order to discern whether it’s easily filllable or not.
- Always assume a $0.05 range in either direction from our limit price - especially in faster-moving markets, as a lot can change even in 15 minutes. So if we publish a trade to sell at $0.90, anything from .85 to .95 is theoretically fair game. This nasty fact of life is called “slippage,” and one major reason we trade ETF products like SPY, IWM, DIA, etc. rather than open-outcry products like SPX, OEX, RUT, etc. is to reduce the impact of slippage.
- All trade alerts should be entered as Day Orders, never as Good-till-canceled (GTC). That’s just because a lot can change overnight, and you don’t want your broker filling your order at 9:31 for a dime less than you could have gotten just because the order was still live. Instead, if you don’t get filled one day, after the market has been open for at least 15 minutes, re-enter your order. Since iron condors don’t shed the bulk of their time premium until very late in the expiration cycle, you won’t lose anything by waiting for the order to come to you.
As always, if have specific questions or any other trouble, don’t hesitate to contact us. In the vast majority of cases, a combination of patience and willingness to budge a penny or two should help you always get orders filled.
Of course, it should go without saying, but this all assumes you’re working with an options-friendly broker like thinkorswim, optionsXpress, Optionshouse, or Interactive Brokers.
