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Bid - Ask Spread on Options

Posted by sonicwave 
Bid - Ask Spread on Options
February 25, 2014 04:05PM
I have a general question about the bid-ask spread on options. When you are going to make a purchase what is the maximum difference for the bid-ask spread that you would consider acceptable? There are some stocks with nice movement that consistently have bid-ask spreads well north of $0.30 but usually around $0.50 to $0.75. Should I consider these stocks as non-tradeable?

Thanks! spinning smiley sticking its tongue out
Re: Bid - Ask Spread on Options
February 26, 2014 09:23AM
Took REGN and put it in my basket. Looked up options. Spread $2+. Took REGN out of my basket.

On average my spreads are .30 or less...I seldom get into spreads higher than that.

If you want your spread to be less on a fast moving stock wait for a pull back then get in. However make sure a pull back doesn't change your signals for an entry.
Re: Bid - Ask Spread on Options
March 01, 2014 09:29AM
I think the rule was to only trade options with big spreads off big charts. You should not trade an option with a big spread off small charts.
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