can i still buy and sell call options if the volume and open interests are 0

[Scataphagos]

+1

Hmm... is that "1 thumb up" for admitting I'm not an options expert or 1 thumb down for "you ain't not expert so shut your F'n trap"? (Of course my post wasn't about options per se, but rather "low OI and its lack of liquidity" as would apply to any issue).

 

[ajacobson]

Look at the liquidity of the underlying. Option MM will have to go underlying to create - also low OI may still give you a decent entry, but it will be a lousy closing trade. Exception would be an exercise to close.
In the 80's the most active option on CBOE was Telefonos Mexice - some days it was more active than the OEX. Lots of zero OI series that you could get 10,000 contracts done instantly because you could buy/sell a million shares without moving the stock. Extreme example, but it's tough to manufacture liquidity. If the stock is ill liquid the options will reflect that. You may be able to get in - but your getting into a roach motel.

 

[spindr0]

As a general rule, it's higher risk to trade in any "thinly traded" market. With an "open interest" of "0", that's the worst... some say you don't want to mess with any option that has less that 100 contracts open interest.

The opening of a new series has an OI of zero. Not a problem in a stock where near the money series are active. But that's a small nitpicky one time event.

Avoiding a low liquidity series is a good idea for a trader but not necessarily so for the average B&H Joe writing covered calls for income or using the strategy for a targeted exit price. If the goal is assignment, it doesn't matter if the spread is wider or the OI is ka-ka. As long as the bid provides an acceptable return/exit price, go for it. But understand that you may regret it if you change your mind from B&H to CYA because the stock is cratering. Then, you'll pay the piper to BTC.