moc order This is a topic that many people are looking for. newyorkcityvoices.org is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, newyorkcityvoices.org would like to introduce to you Options Trading Market On Close Orders. Following along are instructions in the video below:
“Everyone and welcome back to option nalpha in this video tutorial for market on close close orders or moc orders. What we re going to do is actually just nquickly some market order basics because that s basically all that these market on nclose orders are is just a market order executed at the end of the day. Let s go over market orders. They re orders that are used to guarantee nan execution time but not guarantee a price or time of execution with a market order you re going to be nexecuted at a nearest market price as soon as you enter that order it s going nto work instantly to execute anywhere possible and immediate and we guarantee that we re going to get ninto the market.
But we don t guarantee the price as always the benefits is that you re sure nthat you re going to get into the market. But the position will be a little bit riskier nbecause. You have no control over the actual price with an moc or a market on close order. That norder buys or sells at the market price at the close of the trading day.
And what happens nis that the close of the trading day all of the options are hit market on close all of the orders go into the market. As close nto. The end of the day as possible and executed at the end of the day. Let s say that you actually wanted to get nout of the position by the end of the day.
But you had some other obligation or you are nat work or you had something with the kids or you had to step away from the computer. You could actually enter a market on close nand still possibly keep some upside gains. If the market is rallying. Let s say you have some calls and the market nis rallying away from you and you want to keep that upside.
But you do want to get out nat the end of the day well this would be the order that you would nenter now typically most brokers like thinkorswim nrequire that you actually have these orders in by 2 40. Central standard time or 3. 40. Eastern nstandard time and the same risk apply.
Let s actually go at my thinkorswim. Platform. Nhere and take a look at an actual market on close order you can see i have google up right. Now google is trading at 588 and let s say that we actually already own na long 600 strike call on google.
We want to get out of this trade. But not nright now it s up today and we want it to continue nto go higher. So we want to keep some of that upside potential and right now this option is trading at 2410 nso. We d enter at the bid to sell this.
Option it s trading right. Here at 2410. The 600 nstrike and instead of putting a limit price. We re nactually going to change this to an moc or a market on close.
And you can see that the price now goes away nand. It s replaced by this moc. Which means that it s going to be filled at the end nof. The day as long as we enter this order in enough time nfor.
The broker to get the order into the system and queued up for the end of the day. Then nwe will be out of this trade right at the end of the. Day now this could be a higher price than 2410. Nwhere it s trading at right now it could be a lower price than 2410.
It s whatever the end of the day price is that s really the risk that you have with nthe market on close. I m not too keen on using market on close norders. I have to be honest with you guys i rather have a limit on close. If you re ngoing to do that and make sure that you get out of a price you know you re going to nbe safe.
With the market can turn around instantly. And you nmight. Even not want to get out of this position. It might be a long term hold.
And you actually nget stuck getting out of it at a very very bad price at the end of the day. I think. It s usually good to have this in nyour back pocket just in case you need it. But it s usually not the best order that nyou want to enter when you re trading options hey.
Thanks for watching this video from option nalpha as always we invite you guys to come. Back nand check us out at optionalphacom. And if you liked this video. Please.
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