SNDK $45 August Call

Q

qll

45.00 SWFHI.X 2.65 1.50 2.65 2.85 6,912 12,610

I rarely use options.

I use $150k in SNDK. My stop loss is $1000.
I want to risk the same loss in options. What should I do?
The spread is so huge on this at money call. 20c or 7.5%
Is there a way to narrow the spread? Just place a passive order to wait the counter part to take my order? Just like scalping a stock?

By the way. any site providing option charting?
I use yahoo, and they don't have historic price/volume on options.
 
I assume you want to play the bullish side, just as if you were long stock. In that case, and considering that you "rarely do options", the safest way to express your bullish tendencies is to place (buy) a bull call spread (buy the lower strike and sell the higher, same month expiry - which particular strike combo to pick is the next challenge). This will be cheaper than the outright call. However, to answer your question properly would require a lot more explanation of the intricacies of options. I would recommend some further study on the topic so you will at least have a basic understanding of the pricing of options and how to best exploit these.
Best
daddy's boy
 
i did not spead as in "option spread".
i meant spread as in the difference between BID and ASK. how could I make money by buying a call then close the call and pay 8% to the market and make a profit? 8% is HUGE cut by the market.

is option's BID/ASk difference always that big?
 
Quote from qll:

i did not spead as in "option spread".
i meant spread as in the difference between BID and ASK. how could I make money by buying a call then close the call and pay 8% to the market and make a profit? 8% is HUGE cut by the market.
More...

Usually options are held longer than 5 minutes.
 
Quote from qll:
The spread is so huge on this at money call. 20c or 7.5%
More...
.20 is less than half a percent of the underlying, which is quite small. It's not unusual to see bid-ask spreads of 1% to 2%, especially when the underlying stocks are volatile or thinly traded (e.g. TASR).

Is there a way to narrow the spread? Just place a passive order to wait the counter part to take my order? Just like scalping a stock?
More...
Sure, you can place an order at any round multiple of .05 (or .10 if the price is > $3) and see if somebody will take it. Move it up or down a bit if you don't get filled after 15 seconds. If your broker charges cancellation fees, this can get expensive.

By the way. any site providing option charting?
I use yahoo, and they don't have historic price/volume on options.
More...
marketwatch provides option charts, but only shows the trades, not the bids and asks. Brokers like IB have charts that show the bids and asks.
 
the exchanges not your broker charges the cancellation fees. cancellations fees are passed on the customer.
 
the question asked by this thread is a good question. the spread for stock options seem quite wide as compared to stocks and liquidity does not exist

under these limitations how do traders who trade options make money?
 
Quote from zdreg:

the question asked by this thread is a good question. the spread for stock options seem quite wide as compared to stocks and liquidity does not exist

under these limitations how do traders who trade options make money?
More...

by picking good stocks and selling premium to offset that disadvantage as well.


that said, options are usually better for swing trading.

on the other hand, this may change soon -- supposedly options will be trading in penny increments soon. the spreads are bound to come down.
 
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