Futures Lookup   Quote Chart Opinion Profile Markets Futures Forex Funds Signals Sectors My Quotes Education Member Sign-In: › Subscriber Login › Member Benefits Markets Overview: › Market Indices › Exchange Funds › Market Momentum › 52 Week Highs › 52 Week Lows › Volume Leaders › Percent Advances › Percent Declines › Price Advances › Price Declines › Price Volume › Volume Advances › Highs / Lows › What's Hot › What's Not  Stock Options  Market Snapshot  Rankings  Commentary  Education  Glossary › IB Times News › Funds › Signals › Sectors Options Education Featured Sponsor:  Liquidity Options strategies must be applied in specific market conditions to be money-makers. Liquidity is one of these market conditions. Liquidity is the ease with which a market can be traded. A plentiful number of buyers and sellers boosts the volume of trading producing a liquid market. Liquidity allows traders to get their orders filled easily as well as to quickly exit a position. The best way to discover which markets have liquidity is to actually visit an exchange. The pits where you see absolute chaos are markets with liquidity. As long as there are plenty of floor traders screaming and yelling out orders as if their lives depended on it, you will probably have no problem getting in and out of a trade. However, I tend to avoid the pits where the floor traders are falling asleep as they read the newspapers. These are obviously illiquid markets and it would not be a wise move to place an options-based trade there. If you don't have the ability to actually visit an exchange, you can still check out the liquidity of a market by reviewing the market's volume to see how many shares have been bought and sold in one day. As a rule of thumb, I choose markets that trade at least 300,000 shares a day, although one million shares a day is even better. It is also vital to ascertain whether or not trading volume is increasing or decreasing. This kind of volume movement is studied to indicate turning points in market price action. You can also monitor liquidity by monitoring the buying and selling of block trades-orders of 5,000 shares at a time-by institutional traders. Back to Top    Barchart Marketplace  »» Barchart.com © Copyright 2008, Barchart.com User agreement applies. Data provided by ddfplus and subject to terms of use and privacy policy. |  Webmaster Tools  |  Advertising  |  Suggestions Box  |  About Barchart.com  |  Support  | Press Ctrl+P to print this page   Data and information is provided for informational purposes only, and is not intended for trading purposes. Neither Barchart.com Inc. nor its data provider (ddfplus) shall be liable for any errors or delays in the content, or for any actions taken in reliance thereon. By accessing the Barchart.com Inc. web site, a user agrees not to redistribute the information found therein. Press Ctrl+D to bookmark this page - Set www2.barchart.com as your Home Page All Equities and Futures data is delayed according to exchange rules. NYSE and AMEX at least 20 minutes. Nasdaq at least 15 minutes. CME and CBOT at least 10 minutes. NYBOT, NYMEX and COMEX at least 30 minutes.