Ladders

A ladder, in trading, means building a position in stages at a series of different price levels instead of putting it all on at once. Picture a set of rungs going up (or down) a price chart — each rung is a separate order at a different price, and together they spread your entry or exit across a range rather than pinning it to a single moment.

Traders use ladders on both sides of a trade. On the way in, you might buy some shares at 50, more at 49, more at 48, so your average cost isn't dependent on guessing the exact bottom. On the way out, you might sell a chunk at 55, another at 57, another at 60, so you don't have to guess the exact top either. The same idea applies to options: a trader can "ladder" into a position by buying or selling contracts at several different strike prices (the fixed price at which an option can be exercised) or several different expiration dates, again to spread out risk and average their price rather than betting everything on one strike.

The nuance that trips people up is that laddering is a general technique, not a specific strategy or product — it does not by itself lock in gains or guarantee a better price. It simply spreads risk and entry/exit price across multiple levels. Whether that helps or hurts depends on where price actually goes: if a stock falls straight through your buy ladder, you end up with a full position at a worse average price than if you'd waited; if it never comes back to your sell ladder's higher rungs, you leave profit on the table by not selling everything at the first level.

Ladders are also a term of art in options chains and trading platforms, where a "price ladder" or "DOM ladder" (depth of market) is a visual display showing bids and offers stacked at each price level, which is a different but related use of the word — there it describes a screen layout, not a trading tactic.