Explore Your Options  |  NOV 2007

Explore Your Options by Tom Gentile

Explore Your Options by Tom Gentile NOT GETTING FILLED I live in Europe and I often place my orders outside of US market hours. I almost always use limit orders between the bid and ask. For example, I tried to buy a call option the other day, but I did not get filled because the stock opened almost $2 higher than the previous day. I know this is all part of the game, but it’s frustrating to watch a potential trade go up by about 40% in two days and missing out because I didn’t get filled. Is there anything I can do? Some of your orders are not getting filled for two very important reasons. The first is due to the price or quote information used to set the limit orders. You are taking information from the prior trading session, but a lot can change overnight or over the weekend. If you want to buy a call option on a volatile tech stock, shares might open higher if the US stock market is strong that day. If the stock is higher than the previous day, the call options will have increased in value as well. If so, the limit order, which is based on yesterday’s quote, is not going to get executed because the market price is now higher.

by Tom Gentile