Tuesday, July 14, 2009

Re: [TheOptionClub.com] Poll: Stops on Spreads



I'm in the "no stops on spreads" camp. Like Joey said, the spread itself controls trade risk. Position size takes care of portfolio risk.

                                                                                                             Dave


-----Original Message-----
From: Joey Huckabee <trading.ocyg@naguse.com>
To: OptionClub@yahoogroups.com
Sent: Tue, Jul 14, 2009 9:52 am
Subject: Re: [TheOptionClub.com] Poll: Stops on Spreads

I don't use stops on spreads...

The great thing about spreads is they are defined risk, so in my humble
opinion that is your stop.  I prefer to utilize position sizing because
the Bid/Ask Spread on Spreads tends to be wide unless you are trading only
on extremely liquid / high open interest positions. (QQQQ, GE, etc)

Joey




On July 13, 2009 at 4:51 PM cguy444 <carmelo5791@aol.com> wrote:

I believe this came up briefly in the past, but I was hoping we could reiterate this.

Question: "Do you use stops on your spread trades?"

I have been using stops; and I've been stopped out on a couple of positions where it would have been better to have no stop in place as the price reverted back promptly. I took a loss and didn't have to.

Thanks for the input!

Carmelo


 

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