Aren't we always paying the spread?

[Scataphagos]

No, you can get filled at $5.30 even if the NBBO Bid Ask is 5 - 5.6. Once you place a limit at 5.3, if the options market is transparent, then other trades will see that and can take your limit order.

I understand that, but is that what usually happens. Or is what most often happens is that we end up paying the spread when the price declines so that out bid has become the ask at a lower price.

 

[Robert Morse]

I understand that, but is that what usually happens. Or is what most often happens is that we end up paying the spread when the price declines so that out bid has become the ask at a lower price.

In my experience you can often do better than the NBBO spread when it is wide.