Most sites have a choice to sell shares with a trailing stop – placing a stop loss at x% below where the stock is currently trading but continually adjusting the stop relative to the price as it moves higher.
Ex. MSFT trading at 200, trailing stop at 2% which gives me a stop at 196. As MSFT creeps to 220 my stop also creeps to 215.96.
My broker doesn't offer this on options but I'm able to programmatically replicate this with options with a slim bid-ask. Is there anyone who's tried to do this with a large bid-ask?
My issue is that I have a holding where I'm profitable per the current bid, but the ask is way outside of the bid. Something like X-1.5X. Because my broker triggers stops on options based on the ask it seems completely irrelevant to what this large-spread option is really worth or what it could be sold for.
Submitted November 12, 2020 at 10:37PM by GentrifiedStake