Hi, I am trading options (day trading) on GOOG. Currently, I am trading 2 or 3 contracts daily. My question is if I bump the number of contracts to 20 or 30, can I fulfill my position as easy as 2 or 3 contact? What are the downside to trade 20, 30 or more contracts vs 2 or 3 contracts? Is there any correlation between Volume/Open interest and number of contracts? Thank you. James
Yes there is a correlation to Volume for sure. Each contract controls 100 shares so you would be moving from 200 to 300 shares to 2000 to 3000 shares. It takes liquidity to move that number of shares quickly so you would need to insure that there are bids for those shares to move them. I'm not an options person but on the market there is little difference when it comes to liquidity. Not saying it is a bad idea but just need to be aware of the liquidity.
