Why are market orders blocked for long-dated options?
Market orders are blocked for long-dated options due to the illiquid nature of these contracts.
A lack of liquidity means that the
bid and ask spread
in the instrument is very high and can have an immediate adverse effect on the client's P&L. The bid/ask price could be at a price far from the last traded price or theoretical price of the contracts. However, a limit order can be used as a market order to safely execute this transaction. To learn how to use a limit order like a market order, see
How to use limit orders as market orders?
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