Is this IBM option active?

Clarodina, the basic fact is that this is a May 09 option which means that it expires two weeks from now. The chances of IBM being at 60 in two weeks time is really small ie ~0. That's why they have essentially no value.

Nitro is obviously being sarcastic in his response because he'd be happy to buy any option for nothing, just like anyone else with functioning synapses.

I actually disagree a little bit with those who say the volume of 0 is meaningless. A very low volume means that there are no retail buyers or sellers interested in that option who can agree on a price. If you want to trade these the market maker will likely be the only one who will trade with you and he will give you his price in amounts that will be favorable to him. This is not the way to make $$$ in options trading.

In general, a high volume of trades roughly corresponds to reasonably fair prices and lower bid-ask spreads which means a better chance of getting a profit in the long run.

The only case where I'd completely ignore a low volume/open interest is in a hedging situation where I didn't care if the options expired worthless; otherwise, most of the time you'll eventually want to trade out of the position. In that case, you'll want a fair price.
 
The probability of ibm price at 60 (option strike) is not likely in two weeks. So this option likely to worthless. Those seller sold this option would make some small income.
 
Quote from clarodina:

The probability of ibm price at 60 (option strike) is not likely in two weeks. So this option likely to worthless. Those seller sold this option would make some small income.
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if, by your comment, u mean it would be easy money to a seller of this option, then you are correct.

the problem with this great money making idea is that NO ONE is willing to buy them, hence the no bids.
 
Quote from JohnGreen:

If you want to trade these the market maker will likely be the only one who will trade with you and he will give you his price in amounts that will be favorable to him. This is not the way to make $$$ in options trading.

In general, a high volume of trades roughly corresponds to reasonably fair prices and lower bid-ask spreads which means a better chance of getting a profit in the long run.
More...

You're most likely trading with a MM just about 100% of the time and you really have no say in the matter.

"Fair" is a subjective term and volume is more to do with differeing opinions than what is in your mind a fair price.
 
xflat,
Of course, I realize that the market maker is doing the trading with me (or you) a large percentage of the time, but in really liquid options that trade large volumes, the market maker knows that it is a matter of minutes or possibly even seconds before he can unload the options at a modest profit, just taking the bid-ask spread as his cut. Apple is an excellent example of this. Since the volume is usually good across a large selection of strikes, the bid-ask spread is small and therefore the slippage is minimal. That's basically what I mean when I say fair. As I'm sure you know, too much slippage can spoil the fun of options trading pretty badly.

There are "exceptions" of course. SPX options tend to have wide bid-ask spreads quoted, but the real market is quite a bit tighter than that--in fact, a person can check the SPY spreads, and then make intelligent bids that are likely to be filled quite quickly.

TOS has an interesting feature that allows their customers to check other client trading offers, and if you want to match them, you can short circuit the market maker and cut the slippage to a minimum.

My last comment is that options traders should never buy at the ask or sell at the bid. Always try to split the difference; you may not be able to get the midpoint, but you'll usually get fairly close to it.
 
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