Let's say a call is trading $5.00-$5.60... and we put in a bid of $5.30. Is it not true that we usually don't get filled @ $5.30 until the spread has declined to $4.70-$5.30?
I would say no. You can't always get meaning from the mid -point, as that can be altered by small customer orders. That said, there are market makers that monitor spread books looking for an edge to their values. When they get enough, they will trade with you. You need to make sure you are using a broker where your option spreads are not held in an option dark pool so their is price discovery to all participates that monitor the COBs.
The CBOE shows there book here. http://www.cboe.com/cob/ Look at the spread market here first. Better a bid by a small amount and see if you can see your order.
I don't know the answer but from my trading experience here is what I found: What I trade, if there are no volume it usually means the bid/ask are put up by MM and in that case, usually, but not always, I can get mid point fill. If there are volume, bid/ask may be prices offered by us traders, in those cases, mid point may not be theoretical mid point so when one uses mid point one may over/underpay - If I offer mid point when sell/buy and it get fill instantly, I know my offer is way too low/high. Thanks to Robert Morse, I can now find out.
I got filled on PST 180-day LEAPS with only one cent of extrinsic value. Pretty amazing considering no one trades those options but me. You can get good fills on even the most thinly traded of options. Just keep moving it up a penny and it can sometimes help to wait awhile. The midpoint is sometimes not the 'true' value. The true value is mathematically determined, give or take a few. If an option is 4 ITM, the price must be higher than 4, so start at 4.01 and keeping adjusting. The midpoint can sometimes be too high if the MM is messing with the prices
No, you can get filled at $5.30 even if the NBBO Bid Ask is 5 - 5.6. Once you place a limit at 5.3, if the options market is transparent, then other trades will see that and can take your limit order. This way it essentially benefits both parties, however there is risk of buying in between the spread which is not getting filled and having price run away. A good example is trading on the NADEX binary options market. Since Nadex is an exchange, every trade on Nadex is an exchange member and has the ability to trade with each other. I've seen spreads of 40 -50 and then all of a sudden see someone offering to sell at 45 with a size of 1 or 2 contracts. Often times the size will give you an idea that its not a liquidity provider or market maker posting the order but a smaller individual trader.