Did anyone get hit near the 30.30 low. I think that was asked in an earlier post. I'm asking a little different follow up. Is anyone leaving an open order for a fill at say 30, 29, 28, in case we get another flash crash?
Problem is, limit orders don't often get filled in a flash down and up. That's why they need to be placed with a market order. I was wondering if anyone had the temerity to do that this morning?
I canceled my GTC Call option order before market open today, preferring to see where the bottom settles in (which should last foe a few days before the inevitable September dividend run-up). Then I will place a limit Call order at the then ATM Ask price (minus a $0.05).
That's my plan.
Was at my computer this morning plus had my Broker on the phone. Placed Limit Orders for different Sept strikes as the stock melted down to $30.30 and I had a very hard time getting anything reasonable accepted at the $33 and $34 strikes. At one point the Bids were .05 with $2.40 Ask?
The contracts seemed to be overpriced by as much as 40% most of the day according to our options calculators? I was bidding fair value plus a little premium for volatility but no luck.
Do you know why they would be priced so expensively?
>>Do you know why they would be priced so expensively>>
It is always, IMO, about the MM's being able to CTA's ( they don't care about CYA). The MM's need the appropriate hedges in place to take your bids. In a fast moving environment, for example, they have to "allow" for their procurement of Long shares to cover your Call purchases.
This isn't always possible for them to do, in these environments, which typically accompany incresed volatility, increasing your value, and hurting them, if their purchase gets away from them(delayed), and they end perhaps at a +2.00 hedge above the value of your Calls. They often post these ridiculous spreads, on fast moving or thinly traded securities, to discourage the trading of the same, for this reason.
placing market orders in an environment ruled by HFTs is suicidal as the HFT algos will see the orders and manipulate the market to drive the quoted price even lower, so, yes the market orders will get filled first, but at a lower price that anything you will ever see in your quotes, as some of the price movements happen too fast to be quoted.
Limit orders usually get filled at the stock is on its way down.. by the time the order gets executed, the stock is already gone lower.