Bid Ask Spread question

Discussion in 'Options' started by dohdat, Dec 10, 2017.

  1. ironchef

    ironchef

    Based on my own experience trading DITM illiquid simple options, when I sold, mostly I was selling intrinsic value with little premium, but when I bought, I had to pay premium. In other words, mid points were not representative.

    I only trade spread when I have to leg into it and I usually leg out so I have no experience trading spread as a unit.
     
    #11     Dec 11, 2017
  2. spindr0

    spindr0

    I have found that fills are more likely nearer the midpoint with spreads. I surmise that there's more inducement to do because they're garnering two spreads instead of one. That experience may just be because I gravitate toward more liquid options or because there has just always been someone available "just waiting for me" as they take the other side, for the past 30+ years :D
     
    #12     Dec 12, 2017
  3. truetype

    truetype

    It's because spreads are slower-moving so the mms are taking less risk.
     
    #13     Dec 12, 2017