Entering An Option Trade

Nickels add up. It is true. If you are an option trader you probably realize this. Every nickel you make (or save) per option contract is $5. That is $50 on a 10-lot and $500 on each 100-lot. Over weeks, months and years, nickels add up to big money. Interested in learning how to save coveted nickels? How you enter your trades may make all the difference.

Bids and Offers
Off-floor traders usually buy offers and sell bids. This is the nature of being a retail trader. But, any read-blooded trader would always like to get a better trade price. On some trades, I like to use a technique called “middling the market”. That means I try to sell above the bid (but below the offer) or buy below the offer (but above the bid). If I get filled, I’ll get filled at a better price–sometimes saving precious nickels. But this technique doesn’t always work. There’s a bit of a trick to it. Here are some tips on how to middle the market.

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