I don't understand selling a stop limit order on Robinhood.
It keeps saying *High Stop Price* Your stop price is above the current ask price so your order will likely trigger immediately. Does this mean I'm gonna immediately make my money back?
Example:
Current Stock Price $9
Let's say that I bought 5 contracts with a strike price of $10 and a premium of $1.6, so that totals $800 that I "invested" in the call options.
Now, I want to sell the 5 contracts back for say.... break even. Then in this case, I would input the following:
Contracts: 5
Limit Price: 1.6 or do I put $160? - I should put 1.6 because this is the bid/ask price right?
Stop Price: what do I put here? 800? 10? 9? - If I enter 1.6 then I get the High Stop Price Warning
Edit: all the YouTube videos keep giving examples of high values for limit and stop price such as the premium * 100 instead of just the price of the premium... for example Limit Price: $160 instead of $1.6, but I should be entering the ask price before multiplying by 100 for Robinhood right?
Submitted December 25, 2020 at 12:31AM by GetRichWhen https://ift.tt/38uO7eK
