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The Trade Busters

01 - What is a Trade Buster Anyway?

Jul 15, 2021
07:28

Podcast summary created with Snipd AI

Quick takeaways

  • Market stop orders when trading 0DTE SPX options can lead to unexpected losses due to wide bid-ask spreads and market movements.
  • Trade busting should not be relied upon as it indicates substantial risks and can lead to additional uncertainties and losses.

Deep dives

The Dangers of Market Orders and Bid-Ask Spreads

One of the main insights from the podcast episode is the potential dangers of using market stop orders when trading 0DTE SPX options. The speaker shares their personal experience of being subject to wide bid-ask spreads and unexpected market movements when trying to exit a trade. They highlight the risk of getting filled at a significantly worse price than intended, leading to substantial losses. They explain that market orders make traders vulnerable to the whims of the market makers, and emphasize the importance of understanding bid-ask spreads and the potential impact on trading outcomes.

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