How do I buy an option with a huge spread?

Discussion in 'Options' started by spinn, Dec 3, 2023.

  1. spinn

    spinn

    I want to buy some way out of the money calls in anticipation of a large market move in say the next two years. One example is SPXS $30 Jan 2026. It is currently bid ask at 0.01 x3.20 on my IB TWS. I placed a bid at 0.10 but was not filled. Is there any way I can find out what it is actually trading at to place a bid that might get filled? These are lottery ticket trades and gambling so I risk very little but want to be in the game if a big move happens
     
    Ironplates likes this.
  2. newwurldmn

    newwurldmn

    you will have to likely model it to find a fair value and then figure out the fair value. Likely the real ask is around 2.5.
     
    TrailerParkTed and nbbo like this.
  3. Looks like it last traded between 2 and 2.80, so nobody was going to jump on your offer. :)

    upload_2023-12-3_16-54-30.png
     
  4. Quanto

    Quanto

    At broker TD Ameritrade (here current (ie. market closed) data via API):
    Code:
              "putCall": "CALL",
              "symbol": "SPXS_011626C30",
              "description": "SPXS Jan 16 2026 30 Call",
              "exchangeName": "OPR",
              "bid": 1.83,
              "ask": 3.2,
              "last": 2.14,
              "mark": 2.52,
              "bidSize": 1,
              "askSize": 589,
              "bidAskSize": "1X589",
    ...
    
    You should do your analysis with data from regular market hours b/c after market closes then all day orders (the majority of all orders) get flushed, so then only the GTC orders remain in the order book, but which usually can be old or even very old, meaning such old data is inaccurate for price finding and analysis...

    MidPrice = (Bid + Ask) / 2
    = (1.83 + 3.2) / 2 = 2.5150

    BEWARE: IMO such ETFs are a BIG FRAUD! Just watch the chart (click on 5y or Max)
    --> https://finance.yahoo.com/quote/SPXS?p=SPXS
     
    Last edited: Dec 3, 2023
  5. spinn

    spinn

    I am not going to pay $2+ for these so maybe this was not such a great idea. Will keep looking, maybe for others.
     
    Axon likes this.
  6. newwurldmn

    newwurldmn


    Oof. I’m good.
     
    BlueWaterSailor likes this.
  7. traider

    traider

    buy 10 spy
     
  8. ZBZB

    ZBZB

    In IB TWS option trader, right click on the column headers and add model. Then walk your order towards this model price. You should get filled near this price.
     
    EdgeHunter and zdreg like this.
  9. zdreg

    zdreg

    Who in his right mind will tie up capital for years to make .10?You are not alone Jamie dimon put in a low ball bid of $2 to bail out Bear Stearns. He quickly came to reality and paid $!0.
     
    Last edited: Dec 4, 2023
  10. Believe me, I didn't miss that. :)
     
    #10     Dec 6, 2023
    newwurldmn likes this.