Is it worth it to buy options with wide spreads?

I think CLCT will go up a lot these next few months and was looking at Nov '20 calls. It's currently trading at $59.44 and the Nov '20 $60 call has a spread of 4.40-5.80 and the Nov '20 $40 call has only been traded once in the past month. The Jan '21 $80 calls have a spread of 1.5-2.9 and looks to only have been traded once. How do I figure out if it's actually worth it to buy these options? I attached some screenshots for reference

 

Spreads don’t matter as much as liquidity.
But liquidity doesn’t matter as much as opportunity. So you really have to be able to judge the opportunity. Just assume that the option will be difficult to get out of, so the stock price needs to move a lot to make it worthwhile.
On another hand, these spreads don’t look too bad and may be tradable at the mid price. I’m used to seeing even wider spreads, some that totally don’t make sense like $0.40 bid vs $$4.50 ask.

Also check nearer expiration dates to see how the options are priced there, just to have an idea what you may be dealing with later.

 

"don’t make sense like $0.40 bid vs $$4.50 ask."

makes perfect sense

mm's are saying they are not interested in making a market, but feel free to post your bid or offer

they will pick YOU off if they like the price

 

Depends to whom. There are plenty of confused people asking questions about those because it doesn’t make sense to them. It may make sense to you.

 

You will probably get filled in the mid. I would look at the price in vol. terms instead of dollars to get an idea what you’re paying for.

 

Do the math. You need to be willing to open a trade in which you may already be giving up 20% or more, just to fill the spreads.

Long calls with those kinds of spreads are really only appropriate when you have a very good chance of an explosive move in a short timeframe. Otherwise, you'll just bleed to death.

 

%%
LOL, I will take your word for that bid/ask spread.
On options, have to have a real good trend+ right on timing, for buyers, anyway.
Some have zero/goose egg bid.

 

You don't have to, I can pull up 100+ of those at any time

 

If you are going to trade options in wide markets it is important to have a measure of relative theoretical value. To find relative value an implied volatility smoothing mechanism is used.

In CLCT, I have highlighted in red some very wide puts where you would get very burned trading the mid point.

I have also highlighted the call you mention that is $0.60 wide with $4.80 as a mid point vs the smoothed value of $4.84. This indicates that buying on the mid for this option is slightly advantageous since the value is higher than the purchase price.

 

hard to believe ya'll trade options at all

there's no mystery to it , and i already explained what it was.

read my posts carefully, like they were the word of the lord