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Trading strategies with lower spread?
- Thread starter mizhael
- Start date
Trade the $VIX ..
Quote from bt116:
Can u explain this please?
A straddle (the ATM straddle) involves ATM (or close) put and call. These options have usually the highest volume/liquidity, which generally leads to the lowest bid-ask spread. Check any option series and you should be able to see that bid-ask spread is tighter closer to ATM strikes. For instance check IWM and QQQQ, and you will be able to observe it.
Quote from riskfreetrading:
A straddle (the ATM straddle) involves ATM (or close) put and call. These options have usually the highest volume/liquidity, which generally leads to the lowest bid-ask spread. Check any option series and you should be able to see that bid-ask spread is tighter closer to ATM strikes. For instance check IWM and QQQQ, and you will be able to observe it.
ok. i'll buy that. but i think your sort of replacing atm options having the tightest bid/ask for straddles having the tightest bid ask. right?
Technically long call short stock or long put long stock is a straddle too. If you wanted the greatest amount of Vega per expiration youâd look at the atm straddle, but you could also do 2 calls and stock or 2 puts and stock.
As long as you stick with an underlying thatâs listed on 5 or 6 of the exchanges and has reasonable volume youâll find the spreads in the options very very tight these days. In many case a penny or two wide.
As long as you stick with an underlying thatâs listed on 5 or 6 of the exchanges and has reasonable volume youâll find the spreads in the options very very tight these days. In many case a penny or two wide.