Binary Options - Order Entry

by Orcun Yilmaz Professional Binary Options Trader Option trading requires attention to detail at every level, from choosing the underlying and the contract, to entering the order and managing the position. When it comes time to enter an order a trader must clearly see where they are and where they want to be, they need to literally visualize the position in the account.


The trader needs to see how the option will or will not be paired to another option or stock position. This visualization has helped me many times when trading for myself or others. I was acting as the broker for a large trader who I had placed many orders for previously. His knowledge of option’s trading was above normal and so was his account balance. We had been working on different covered call and spread strategies for weeks and I had come to learn his style when giving me orders. What I learned was this guy wasn’t focused on them correct things when giving the trade, he would often read out the full name of the option, XYZ Dec 25 Call, but would then give me the symbol for the Sept 15 Put. Once I learned his style I knew I had to be extra cautious for his sake and mine, unfortunately his appreciation for my style was lacking.


During one trade in which he was obviously in a hurry he order 1000 call contracts to be sold to open, after repeating the order three times to confirm the size, I was told to place it. Needless to say it was not what he ultimately wanted but because this trader would not hesitate to put on larger positions like this, the
order has some aspect of legitimacy. The four different option order instructions; buy to open, buy to close, sell to open and sell to close, must be indicated at the time of the trade. Any mistake in the delivery of these instructions can create nightmares.

Entering binary options orders, either through and electronic application or with a live person, is much more complicated then entering stock orders. Not only does the individual have to understand the basics about bids and offers, buying and selling, but they must also understand the movement differences in calls and puts, opening versus closing, and the different markets with different prices. For the most part, equity options now trade on five different exchanges simultaneously. Each market place is entitled to make it’s own market and publish it own autonomous bid
and offer. An option order placed on the Pacific is not necessarily entitled to the price reflected on the American, CBOE, Philly or ISE. This reality may be frustrating if a trader is trying to get filled at the inside market but their order is not getting executed.

Binary options trading requires a lot of dedication and my upcoming articles will even help you more to understand.

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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