Invenstment - Option Orders

August 14, 2008 10:49 AM

I have traded stock Options for a while but would like to have the following order type: Example - Option Price = 3.90 Put in a order to sell if price goes below 3.50 or sell if price goes above 4.50 I have looked at stop, stop limit, limit, trailing and the works, but is there a technical name for what I want, and do brokers offer it? Thanks! BB
posted by bright77blue to Work & Money (5 answers total)

Bracketed Orders?
posted by mincus at 11:13 AM on August 14, 2008

Also called "One Cancels Other" or OCO.
posted by fatllama at 11:27 AM on August 14, 2008

Yeah, and consider ThinkOrSwim, as their platform offers dozens of trading schemes, including brackets, OCO (one cancels other) orders, triggers, and plenty of options strategies like condors, broken wing butterflies, etc, and tons of literature on all of them. And they're dirt cheap and have amazing support.

And their software is insanely great.
posted by disillusioned at 11:28 AM on August 14, 2008 [1 favorite]

OCO as fatllama has posted already.
The lower price in your example would have to be a stop or stop limit.

But you already knew that.
posted by Chuckles McLaughy du Haha, the depressed clown at 1:12 PM on August 14, 2008

yeah everyone above has it. if you place the order over the phone with a broker, you're selling 100 on stop @ 3.50 OCO sell 100 @ (limit) 4.50. if you're online just look for 'OCO'. as soon as one order is executed, the other cancels - you may want to check your brokers' policy on partial fills to avoid surprises. the volumes should step down equally in real-time on each side as your fills are confirmed on the active leg, otherwise you'll run the risk of over-trading in volatile markets.
posted by bookie at 4:29 PM on August 14, 2008