Options with high liquidity and small spread

I

ivanbaj

Are there options with high liquidity with small bid/ask spread?

Looking to trade options short term (1-2 days). What is the bets way to lower commision cost on options? (I am using IB).

Do you think this is feasible?

Thanks in advance for your help.
 
Quote from ivanbaj:

Are there options with high liquidity with small bid/ask spread?

Looking to trade options short term (1-2 days). What is the bets way to lower commission cost on options? (I am using IB).

Do you think this is feasible?

Thanks in advance for your help.
More...


Feasible? Yes. But it depends on your market timing skills.

SPY, QQQ options fit your needs.

To lower commissions with IB, you must trade very large volume.

Mark
 
Quote from dagnyt:

Feasible? Yes. But it depends on your market timing skills.

SPY, QQQ options fit your needs.

To lower commissions with IB, you must trade very large volume.

Mark
More...

Do you think I should use the closest expiration month for short term trading?

BTW:

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=2368962">
 

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for short term trading use always front month, as when trading back month there are also substantial vega risks that i assume you want to avoid while liquidity and spreads are not that good as well.
 
dagnyt, one mo re question. What is the minimum average daily range for the underlying compared to the option strike price spread that will make sense to trade short term?

The SPY are priced at 10 point spread compared to the underlying so if the the daily range drops to 20 points or less I don't see how short term long options trading will work.

Thanks for your help!
 
Quote from ivanbaj:

Are there options with high liquidity with small bid/ask spread?

Looking to trade options short term (1-2 days). What is the bets way to lower commision cost on options? (I am using IB).

Do you think this is feasible?

Thanks in advance for your help.
More...

With all respect if you don't know the answer to those questions you're gonna quickly have your money removed from you. There's a LOT to learn. Read historical forums here as much as possible.

Most of your active stocks have decent options. Dow 30 for example. Also consider ETF options: SPY, QQQQ, IWM, DIA, etc.

NDX has decent & liquid options if you want a larger leveraged instrument so you can reduce your # of contracts and thus commissions.
 
Quote from ivanbaj:

Do you think I should use the closest expiration month for short term trading?
More...

Yes ........ And the last week to expiration would be the best because you won't be able to hang on to losing trades for longer than your 1-2 day time period.

No sense paying for time premium you do not want.






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Quote from ivanbaj:

dagnyt, one mo re question. What is the minimum average daily range for the underlying compared to the option strike price spread that will make sense to trade short term?
More...

I have no idea.

I would never day trade options. Sorry.

Mark
 
Quote from dagnyt:



SPY, QQQ options fit your needs.
More...


How do you figure that? The spreads are insane.

The OP asked for something with small spreads. Index options are definitely not that animal.
 
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