OTM limit sell order

N

NanoTick

Has anyone sold options at far out OTM range where the bid is largely 0.00?
If you put a limit sell order there, what's the chance of being filled (i.e. how long did it take if ever?)
 
In my opinion, selling teenies is not a very sound strategy; you're picking up nickels in front of a steamroller. As an extreme example, ask the folks who sold deep OTM NFLX calls around the last several earnings. You can lose years' worth of premium in one day.
 
Quote from noregrets:

In my opinion, selling teenies is not a very sound strategy; you're picking up nickels in front of a steamroller. As an extreme example, ask the folks who sold deep OTM NFLX calls around the last several earnings. You can lose years' worth of premium in one day.
More...

Agreed, but that's not the point of the question. I'm just asking technically how quickly this kind order can be filled.
 
I've done this, but not for a profit. I was once in a situation where I was long options, it was close to expiration, and the underlying went way against me so that my position ended up practically worthless. I figured that I might as well salvage what few dollars I could out of it and entered an order to sell at $.05. I ended up with a partial fill. The person who bought them was probably closing out a short position.
 
Quote from NanoTick:

Agreed, but that's not the point of the question. I'm just asking technically how quickly this kind order can be filled.
More...

My fault. I have been in your situation many times after an earnings play holding deep OTM long options (from an iron), and usually I was not able to get a fill, perhaps because so many other folks were trying to salvage some value out of them at the same time and they were very close to expiration. It never hurts to try though.
 
Quote from NanoTick:

Has anyone sold options at far out OTM range where the bid is largely 0.00?
If you put a limit sell order there, what's the chance of being filled (i.e. how long did it take if ever?)
More...

The chances of getting a fill are very low. To get an estimate look at turnover volume for that strike and compare it with the volume on the ask. Usually you will see that there's only 1 fill for every 10 or even 100 options offered. There're more chances to get a fill if you post your quote quickly at market open so that your order is close to the top of the queue. Then sit and wait, it's like fishing ;)
 
You must log in or register to reply here.
Back
Top