Some trading platforms and brokerages offer an advanced order type called the “Walk Limit” order.
If you have this order type available, I would encourage you to learn to use it so that you don’t get unfavorable order execution fills.
The Walk Limit order comes in two forms: the Walk Limit Credit and the Walk Limit Debit.
Contents
- Walk Limit Order For Credit
- Walk Limit Order For Debit
- Conclusion
Walk Limit Order For Credit
Consider the bull put credit spread on Honeywell (HON).
Date: December 5, 2025
Price: HON @ $191.39
Buy to open one Jan 2nd HON 195 call: bid: $2.20, mid: $2.52, ask: $2.85
Sell to open one Jan 2nd HON 190 call: bid: $4.70 mid: 5.10 ask: $5.50
Net Credit: bid: $1.85 mid: $2.58 ask: $3.30
Honeywell options do not seem to be very liquid, as can be seen from the wide bid/ask spread.
A trader wanting to buy the $195 call option could potentially pay anywhere from $2.20 to $2.85 per share.
The bid/ask spread for that option is $0.65.
The bid price of $2.20 is what buyers are willing to pay for it.
The ask price of $2.85 is what sellers want to sell it at.
The mid price is the average of the two prices.
Ideally, it is better to find a more liquid stock to trade options on.
But in any case, that is up to the trader and how much he believes in the trade thesis that he is willing to give up some slippage.
Slippage is the amount a trader loses (or is willing to give up) between the mid-price and the actual fill price.
Since a bull put spread uses two option legs, the net credit reflects slippage from both legs, which can result in a wider effective bid-ask spread.
In this case, the trader can get a net credit of $1.85 or as much as $3.30 for the bull put vertical.
Since one contract represents 100 shares, the credit received for opening the trade can be from $185 to $330.
That is a big difference.
Ideally, the trader would like to get a big credit of $330. But that order would never fill.
He tries for a credit of $320.
Nope, no fill.
Try $310.
Wait.
No luck.
Cancel and replace for a $300 order.
And so on.
It is time-consuming to watch and wait for fills, not to mention to click a whole lot.
A better way is to use a Walk Limit Order for a credit that would automate this walk towards the mid price.
For this order, the trader specifies the start price.
Let’s start at $2.90, and he is willing to get a credit as low as $2.50 – but no lower.
We want the platform to increment the price by $0.10 each time and wait 60 seconds at each price.
The order would consist of entering the following information:
Order type: Walk limit credit
Timing: Day
Start price: $2.90
End price: $2.50
Price increment: $0.10
Time (in seconds): 60
Depending on the platform and brokerage, there may be a limit to the maximum wait time before increment.
Depending on the asset’s type and size, the minimum price increment could be as low as $0.01 or as high as $0.10.
Suppose the price reaches the end price without getting filled.
The order will stay at that price for the rest of the trading session.
For many brokerages, it is treated as a day limit order that expires at the end of the day.
In this example, the trader got filled 5 minutes later for a credit of $2.50, initiating the bull put spread.
Not too bad.
That is $0.08 off the mid price of $2.58.
We can say he lost $8 due to slippage.
Walk Limit Order For Debit
Suppose an investor is buying a calendar option spread on United Healthcare (UNH).
Sell to open on Dec 19 UNH $325 put: bid: $6.05 mid: $6.38 ask: $6.7
Buy to open on Dec 26 UNH $325 put: bid: $7.25 mid: $7.65 ask: $8.05
Net Debit: bid: $0.55 mid: $1.27 ask: $2.00
This time, the investor needs to pay a debit to enter the trade.
She wants to pay as little as possible.
So she starts at a price lower than the mid price.
She will have the walk limit order slowly increase the price by $0.01 each time.
Waiting 60 seconds each time for a fill.
She is willing to pay at most $0.03 above the mid-price if the order is not filled earlier.
Order type: Walk limit debit
Timing: Day
Start price: $1.15
End price: $1.30
Price increment: $0.01
Time (in seconds): 60
In this case, she got filled at $1.21, which is $0.06 better than the mid-price.
By slowly walking towards the mid-price, it is possible to get a better fill than mid-price, as the price of the two options’ legs fluctuates randomly.
Conclusion
The walk-limit order is a good tool for saving time when negotiating for a decent fill.
We hope you enjoyed this article on How to Use the Walk Limit Order Type.
If you have any questions, please send an email or leave a comment below.
Trade safe!
Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek advice from a licensed financial adviser.
Original source: https://optionstradingiq.com/walk-limit-order/