selling OTM to get $5?

0

0008

I found that many OTM options of stock are trading at $0.05. So one contract worths $5. Commission of IB is $1. What is the point to sell such options? Getting $4?
 
Quote from 0008:

I found that many OTM options of stock are trading at $0.05. So one contract worths $5. Commission of IB is $1. What is the point to sell such options? Getting $4?
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so what's wrong with that ??

btw IB commission would be $0.50 :)
 
So get $4 for unlimited risk? Unless you sell thousands contract, I think you can't make any significant profit.
 
Quote from 0008:

I found that many OTM options of stock are trading at $0.05. So one contract worths $5. Commission of IB is $1. What is the point to sell such options? Getting $4?
More...

I wouldn't sell teenies, but the point in BUYING such cheap options, at least for those who sell options, is to close out a profitable position. In that way, I would be paying six bucks ((.05*100)+ 1) for that transaction

Well worth it, imo, when closing a trade.
 
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