If you would like to place a bought strangle it is important to be able to communicate this to your broker effectively so the correct trade is placed. Below is the order and information you need to tell your options broker:
- Strategy: Bought Strangle
- Trade: Buying 3 contracts SUN $6.61 April Call
Buying 3 contracts SUN $6.37 April Puts
- Premium Paid: $0.65
- Type of order: Always clarify the type of order; the normal type for bought strangle is at best with a limit of $0.65. This means the broker will try for a better (lower) price so you pay less premium but not more than the limit price.
- Length of order always should be clear whether the order is for the day only (GFD – Good for Day) or until the order is filled (GTC – Good till Cancelled). This means you will never have unexpected orders placed in the market.
- Confirmation: Also confirm the exact order at the end of the phone conversation to try and eliminate mistakes and miscommunication.
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