From Theory To Practice - April 23, 2021 - Wider Markets? More Uncertainty

published 2 weeks ago by tastytrade, Inc.

As tastrytraders, liquidity might be the most important metric that we use when it comes to analyzing potential trade opportunities. This is because stocks and options with more liquid markets make buying and selling a lot more seamless and efficient, and the midprice of the bid and ask is much more likely to be indicative of the true value of the product. With our CMG position, we see firsthand the downside of trading a not-so-liquid stock.

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