So I goofed. Today I bought 2 BX 34.5 calls that expire this week. Everything was fine until the last few market minutes where the premium completely dipped. On robinhood the implied volatility and Greeks are completely dashed while the bid and ask are very wide which I’m sure is what caused this price dip because the price of the stock itself did not move much at all. Is this trade completely done for and trash or is there a chance that the spread may get fixed up soon? I made the trade based on TA and so I’m hoping the price rising above the strike price will save this trade (if my TA prediction is right). I’d love to discuss this and thank you in advance.
Blackstone is not a great stock to trade options on. The vol/open interest is small. For the 34.5 calls the open interest is 4. Your 2 contracts make you 1/2 of the open interest. Not sure what you mean by the premium completely dipped. Many times toward the end of the day the market maker will push the Bid low. Sort of saying finished trading for the day. Up to you to play the bid ask spread and see what happens. Strange things happen on the open also. But usually by 9:45 the market should be reflecting a "fair" price. FYI - I don't know what you paid for the options. In the beginning some people think the stock price has to exceed the strike to make money. Many times you can make money without this happening. Just out of curiosity - what is your TA.
I payed 172 total with both contracts and my TA is bill Williams alligator and awesome oscillator together with linear regression forecast. What I was wondering was if the price moved more in the favor of the trade would it be enough to raise the premiums higher and would it also effect the bid ask spread to be more favorable? If so I might want to still hold on and see if it can move in the right direction because otherwise I might have gotten in a dud trade and I’d hate to lose 80 bucks over nothing.
Option Prices after hours are not reliable indicators so I wouldn't worry too much about. Wait until tomorrow after the Market opens and you will have a more solid indicator of where you stand. Just a quick note, I echo what Ayn Rand says and I would like to add that if you are using options only for leverage you might have certain preconceived notions about how they react to price movement and market conditions. I would suggest you try to learn as much about options as you can, especially the concept of Implied Volatility and its influence on pricing.
I have been looking into and reading about implied volatility and the Greeks so I do understand that they influence options premiums quite abit. Problem is that robinhood has dashed out the Greeks and implied volatility so they don’t show those so I’m kind of left in the dark about that.
Isn't there trading software that can keep you the right side of the spread ( over a period of time) in a sense market making , just asking , I don't trade options.( interactive brokers have some sort of algo mkt entry for stocks which I use and seems ok to me)
1.10 x 1.28 (bid x ask) Looks like you can get out with a profit right now. Still, $0.18 of bid/ask spread on a $1.17 option (> 10%) is a sign of lack of liquidity so next time try to look for options with tighter bid/ask spreads.