to: experienced option traders:
At 12:46 EDT, AMAT was at 22 5/8, and ZPJAH (2001 40s) was at bid/ask 3.75/4.00. This is a smaller spread than the options usually trade at, probably because the price of the option has decreased a lot. I split the difference, and placed a limit order for 100 contracts @ 3 7/8. 6 minutes later, the order was filled. The stock price hadn't changed.
In your experience, is this the best way to buy options? That is:
1) can you usually get an order filled (buy or sell) at the mid-point between bid/ask?
2) Is there ever a reason to place a market order?
3) I use E-trade. Is there much difference between how different brokers handle option orders, or do all orders get funneled to the same market makers for each particular stock, so it really doesn't matter which broker you use?
4) Do the market makers fill my order (to buy a call) only when someone else is willing to sell the call, or buy the puts? Or are they obligated to buy/sell them at the quoted bid/ask, and then it's up to them to find a counterparty? Obviously, they are not obligated to fill a limit order half-way between bid and ask, buy are they obligated to fill a market order?
Thanks in advance; I'm still learning the rules of the game.
Tito, where are you? |
