Chapter 2. Placing a Trade
Indexes are probably the best instruments to trade condors, and the SPX, RUT, and NDX are the best of this group. The two main reasons are liquidity and their use of European-style options. The greater the liquidity, the easier it is to execute the trade, and European-style options increase your safety by eliminating the risk of early exercise.
The buying and selling of contracts takes place through an auction process. The bid represents what the buyer wants to pay, and the ask is the price the seller is seeking. There is no right way or wrong way to approach the bid-ask spread, but how you negotiate the price will result in different outcomes in your trading.
In an electronic market the difference between the two ...
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