When there is 0 OI, there is usually 0 volume when you trade.
Yes, as @Same Lazy Element said, usually a lot (wide bid/ask is the norm).
Like buying lottery tickets, low win rate.
[Newbie Question] Can I trade a bull put spread if the OI and volume are 0?
- Thread starter nwoptions
- Start date
Like buying lottery tickets, low win rate.
When you read anything promoting or describing options strategies, you need to consider that the actual trading costs to implement those strategies is seldom considered.
But the expense of options trading - the commissions and spreads - can kill most strategies.
Now, in the case of options with very low volume, that's doubly true. Because (1) You may have difficulty even getting filled on your order, and (2) You are likely to get on the bad side of a bid/ask spread, and give up most or all of your profit before the trade is even underway. And remember that this holds true for both your entries, and exits. You have a double shot at getting ripped.
You should not be trading options in any event until you've put a few years into trading the underlying. But if you feel you must (duh), always stay with high volumes and tight spreads.
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Based on advices given by the professionals you shouldn't go there.
But if you are an amateur retail insisting on trading thinly traded options, what is tradable has nothing to do with OI or volume.
It is a possibility but it shouldn’t be done.
