Looking to buy puts on Google - why is open interest so low?

F

fifthavenuebull

I am new to options and am dutifully eating my humble pie, aka getting my paper buns kicked.

Nonetheless, I'd like to get my human buns kicked too.

So:

I'm trying to buy puts on Google, and I have a few questions.

1) Should I buy GOOG or GOOGL? What's the difference?

2) Why is there VERY little open interest on both puts and calls? Is that an indicator of something?

3) Hints on the calendar? Next Friday is 3rd Friday - is that a problem?

Cheers!
 
The only difference between GOOG and GOOGL is that GOOGL (class A) shares provide voting power. Both GOOG and GOOGL shares are likely to perform the same over time with regards to stock price. If Alphabet ends up paying a dividend, then both types of stock will pay out the same dollar amount.

I’d prefer GOOG since I wouldn’t vote anyway and rights aren’t free.

Open interest depends on the specific contracts. Price ... Expiration ... Little compared to what ? Volume matters more than open interest as you want your underlying to be liquid.

That’s all I can tell.
Not an option trader.
 
OP, what strike price & what expiry are you looking at?

hint, on the OTM puts- low open interest/low volume you'd want to believe the stock is bullish
 
Sekiyo said:
Open interest depends on the specific contracts. Price ... Expiration ... Little compared to what ? Volume matters more than open interest as you want your underlying to be liquid.
More...

Open interest tends to be a better indicator of liquidity than volume. If you have heavy OI you can get out of a trade with an offsetting trade because there are trades on the books ready to go. Volume is not necessarily indicative of overall liquidity - though you can and should use both with a heavy dose of experience. I tend to use volume to find options that are a tick wide or so, and OI to judge the actual "liquid potential" of the contract.
 
gaussian said:
Open interest tends to be a better indicator of liquidity than volume. If you have heavy OI you can get out of a trade with an offsetting trade because there are trades on the books ready to go. Volume is not necessarily indicative of overall liquidity - though you can and should use both with a heavy dose of experience. I tend to use volume to find options that are a tick wide or so, and OI to judge the actual "liquid potential" of the contract.
More...
I'm learning so much here -thank you for your reply. I really appreciate it!
 
gaussian said:
Open interest tends to be a better indicator of liquidity than volume. If you have heavy OI you can get out of a trade with an offsetting trade because there are trades on the books ready to go. Volume is not necessarily indicative of overall liquidity - though you can and should use both with a heavy dose of experience. I tend to use volume to find options that are a tick wide or so, and OI to judge the actual "liquid potential" of the contract.
More...

Thought open interest as share holders.

If OI > Volume then,
Selling potential > Buying potential
Since OI is only positive, holders, I believe.

Liquidity is scarce since trades, volume, isn’t easy (facilitated) but the underlying is crowded.

Like a sold out theater with only one tiny door.

Volume is still a better proxy ...
I believe, for liquidity.

Such as: Volume / ((High-Low)/Tick size)
 
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