Pricing options and bid-ask spread

Discussion in 'Options' started by shay84, Sep 24, 2013.

  1. shay84

    shay84

    Consider a non-liquid option market with a wide bid-ask spreads across all strikes.

    Spot: $52

    A snapshot of the $50 strike shows:

    Bid - Ask
    Call: 2 - 4.5
    Put: 0.5 - 3.5
    Assume 0% interest.

    Is there a set of rules or a model that could minimize the range of possible IV's by entering the option's bid/ask prices?

    because these options have a very wide spread and their last price changes sporadically i cannot achieve one appropriate fair value/IV for each option, and as i have mentioned, it's applies to all strikes and therefore i'm incapable of forming a skew. so my question is if there's a math way to obtain min&max fair value outcomes for each option?