are deep in/out hard to trade

Discussion in 'Options' started by 0008, Apr 27, 2004.

  1. 0008


    Deep in/out-of-the-money options have very few transactions. Are they very hard to get in and get out?
  2. DTK


    Not at all if you don't mind paying the huge spread.
    I find that they can often be qwirky though. I don't know whether it's supply/demand throwing things off or a strage thing happening with one of the greeks, but I remember TASR deep OTM puts trading higher on the first day TASR started going down but the next day when TASR continued to go down, the premium on the deep OTM TASR puts went down too... tricky.
  3. %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
    Deep ITM are more investments than trades;
    if they 're listed on 4-6 exchanges, easy to get out with market order. Also like dividend stocks with small bid/ask.

    No ,
    none [0%] are as liquid as say comparing DIA, SPY-SPX, QQQ underlying
    to thier most liquid options on DIA,QQQ.

    Prefer ITM & some ATM rather than combos you mentioned;
    might write a bit more [on this screen on deep OTM by May 20]

    :cool: :cool:

    ''Divide your merchandise amoung 7, 8 maybe''- Solomon-trader king
  4. Deep ITM options can be offset in the underlying if it's a better deal than paying the spread.

    Deep OTM options with thin to no volume - you're out of luck, you'll pay the spread.
  5. lyfegrd


    My question to you 0008 would be what do you want out of trading deep ITM/OTM options?

    As the other replies mentioned you can do this, however you would be subject to the spread. Depending on the underlying the spreads can be rather large(.15-.20) in deep ITM, and although relatively narrow(.05) in OTM options the delta is so small that even a half a point move won't get you to break even sometimes.