The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to talk about the pros and cons of placing a limit order. A limit order when trading options is simply an order that specifies exactly what your maximum price is that you are willing to pay or your minimum credit in which you’re willing to accept if you are selling options. I prefer to do all my orders using limit orders and the reason I like them is because I know exactly where I’ll get in and where I’ll get out whenever the order gets filled. Now, that obviously to me is the biggest pro of using limit orders. You can naturally adjust limit orders multiple times and you can do this actually very quickly. You can place an order for $150 and if that order doesn’t get filled, you can quickly readjust the order and place it for $151 effectively creating your own little market order, but you are in control of the prices that you’re posting and the prices that you’re using. Now, if we take the flipside of