Trading Tip: Using GTC Orders to Juice Your Returns

July 5, 2023

Today, we’re going to look at a simple strategy Options Income Weekly and Income Masters members have been using to boost the income they are generating from selling options.

You’ve likely heard of a good ‘til canceled (GTC) order. It is an order to buy or sell a stock or option that lasts until the order is completed or canceled.

When selling options, it often pays to ask for a few cents more than the ask price by setting a GTC order and seeing if it gets filled. After doing so, you may want to minimize your broker screen or close your broker app, or even walk away from your desk for a bit to give the order a chance to fill. This helps reduce the urge to lower your limit price if you don’t get filled right away.

Of course, you can always adjust your GTC order lower after a few minutes or hours if you are set on getting filled. But since there is no time limit on the order, if you leave it in place you could be filled the next day or at any time before the option expires or you cancel the order.

Let’s run through some recent examples of how we’ve been using these orders to generate additional income.

On June 27, we recommended Options Income Weekly members sell an Advanced Micro Devices (AMD) 14 Jul 100 Put. Rather than accepting the premium that we saw on our screens during the live trading session, which was around $0.91, we entered a good ‘til canceled order at $1.

We didn’t get into the trade during the live session, but it filled the next morning. By being patient and utilizing a GTC order, we were able to pick up an additional $9 per contract in premium. While that may not sound like a lot, it’s 10% more income. And we were able to close the trade two days later for a $60 per-contract profit, or a 0.6% return on our capital.

We’ve also used this strategy a handful of times in Income Masters recently, including on back-to-back Amazon (AMZN) trades. With one of those trades, we sold the AMZN 7 Jul 124 Put, which was going for around $1.10 during our live trading session. We entered a GTC order for $1.25, and it filled about 15 minutes after we wrapped.

This time members were able to pick up an additional $15 per contract in premium, or 13.6% more income. We closed the trade five days later, booking $75 in profit for a 0.6% return.

Most recently, we entered a GTC order when selling a bull put spread on Generac Holdings (GNRC).

During the live trading session, we were only seeing about $0.75 for the GNRC 14 Jul 136/131 Put Spread. We set a GTC order at $0.90, hoping to get filled on a pullback in the stock.

We filled the next day, picking up an additional $0.15 in income per spread, or 20% more premium. We closed the position early, booking a profit of $0.60, or $60 per spread, and earning a 12% return in just four days.

It may sound cliché, but patience really does pay off. As you can see from the examples above, more premium translates into bigger profits and greater flexibility in managing and/or closing trades.

As we like to say here at Traders Reserve, “Ask for more, because you’ll often get it.”

Trade smart,

Emily Norris
Managing Editor
Traders Reserve

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