PROBLEM WITH OPTIONS
The market moves faster than you do the analysis
- Before I can post the analysis this morning, market hit target price already
Solution - do the math at night while the market not moving
- after you make it as your second nature (subconscious mind)
The bid/ask spread may be larger than you want
The commissions would be larger than you think
The market doesn't have enough contracts for you
Said you bid for 10 contracts @200, DL 200 but you might have settle only 2 contracts
Worst case, market move so fast MM (Market maker) don't give you the price,
e.g Gap up in the pre-market, but they know there will be retreat,
they won't give you the fair price
P.S. Next post with commission factor