options call

C

cashclay

Im looking at the options chain for exxon. theres an option that i can buy strike price of 75. XOM is at 77.40 with an ask price of .22 cents. My question is why cant i buy the 75 right now at .22 cents and just sell it at a bid price of .20 and just profits the difference??
 
Look again! XOM has no 75 strike Calls offered at 22cents! Post what you are really observing, and perhaps someone can help. Which expiration are you looking at?
 
Soi when you sell your call after it not going your way, would you lose money on the difference of the strike price and bid and ask price difference as well? And would this be vice versa for a winning trade?
 
Today expiration series XOM Call option with strike at $75 will cost you about (Ask: 4.30), with underlying at 79.16: You are paying a premium (79.50 for a 79.16 value) ! You will lose money. These short term options may not be the ideal place for you to learn option trading. -- you may be able to shave some off the ASK, but no guarantees.
 
yes i know i came ot that conclusion lol. im an idiot. im so caught in trying to figure this out and the smallest confusion sends me into the waters
 
Trading typically incurs slippage due to Bid/Ask spread. If not careful and liquidity is too low, you lose some going in and you lose some going out. IF liquidity is adequate, you should be able to at least buy at the ask, and sell at the bid. Many times you can do better if liquidity is there. IF liquidity is NOT there, my advice is to stay away. Look at the bid and asked sizes, as well as the Open Interest.
 
sometimes, we [including myself] know just enough to get us into trouble ;)


i learned quite a bit reading McMillian's book - Options as a Strategic Investment
[lots of the basics in there]

marc
:banghead:
 
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