Anybody trade DJX options?? How do you handle the bid/ask spread and what's the average holding period??
I trade DJX options and in response to your questions: I have to say it depends. The current market situation is very volatile and it would make a lot of sense to close your position(s) when the market closes. (If you made money, why risk it?? If you lost money, why risk losing more??) This is particularly advisable as the expiration of the index option approaches. However, you are the best arbiter of your trading strategy. Only you know your plan and the reasons for it. As for the Bid/Ask spread. . .you always want to try to get as close to the Bid price as you can. Options don't usually run as "close" as stocks do. . .but you can try. When the price hits my target, I always try to go under the current Ask whenever I place a trade. Sometimes, if there is not alot of action moving against me. . .my trade will get executed. Other times when the market is moving against me. . .I get screwed. These things are up to you. Sometimes, you may decide to pay retail when something is in short supply. As for my average holding period. . .these days not very long. Less than a day. My best advise to you is know when you you plan to get out before you ever get in. (Stops and limits) Stick to it!! And when you profit. . .take the money and run. I hope this helps. Good luck!!! Btw, I hope your broker is OptionsXpress. They are awesome!!!
for trading DJX options http://www.thinkorswim.com/ I do not use them , but after hearing one of their traders talk about certain strategies they use and the advantages of using their platform it might be worth a look