Need some expert insights here. situation
Hello everyone,
I have a question here, which is that suppose if a hedging/arbitrage options strategy for nse f&o stock contains one leg of ditm(deep in the money-probably +1 delta call) buying and buying -1 DELTA PUT, both with a wide bid-ask spread, sensibull shows it to be illiquid, i am afraid that execution risks are pretty high here and can cause slippage, and one more thing, is it ever possible to fill the order at least possible cost(i mean the initial price/cost). Should we place limit orders near bid/ask price, then it makes it difficult to maintain profitability, and whether i should place in mid point of bid-ask ? or slightly near but below bid while buying ditm ce+pe for my hedging strategy, please see: any strike with delta 1/-1 and least oi is what i am supposing here. is this possible, and if someone says yes, please explain to me the factors which play a role in our order getting filled, does placing limit orders in early market hours affect it(i see yes)… and is there any way to figure out the probability/chance - or even develop a logical model of whether our buy order will get filled…
And would you suggest me to use this approach ? well this is not the complete strategy btw.