by Dawn Pennington 08/21/08
The great thing about options trading is that you really don't have to be glued to your computer screen, watching and waiting for a put or call that you want to buy or sell to reach a recommended price level.
Of course, you could do that if you want to get a feel for how that option behaves on a particular day. But if a trading idea comes your way after the market has closed -- for instance, to buy a particular option up to $1 -- no doubt you'll want to try to jump right into that trade when the market opens the following morning.
GIVE YOUR BROKER HIS MARCHING ORDERS ...
Given that it's not always possible to catch that ideal entry price due to things like meetings and doctor's appointments and other life events that keep you away from your broker's Web site, the options markets offer a variety of order types that allow you to leave execution instructions with your broker to initiate a trade when one or more trading conditions are met.
One such type is a market order, which means your broker will fill the order at whatever the market price is when the instruction is received.
If you want to be a little more cautious -- given that options can move much faster than stocks -- you can place a limit order, which enables you to set an order to be filled at a particular price or better.
There's no guarantee ...
Read This Before You Buy Another Stock
A savvy stock position can start with a single options trade.
This technique can help you breathe a sigh of relief as it aims to relieve a 'choking' portfolio.
If you are familiar with buying calls and puts, we'll show you how to buy them even cheaper.
Anatomy of a Stock Option Ticker
Option tickers may look like a bowl of alphabet soup to you, but each letter means something.
You don't have to short stock to put a bearish bet on the table -- but the path to profits comes with different levels of risk.
