Humor me in this thought experiment.
Let's say we have a stock with low IV and we're looking at put options 30 days out, out of the money.
The bid is at 1.5 and the ask is 1.7. Assuming there's a decent amount of liquidity, wouldn't it be a good move to sell to open with a limit order for, say 1.69?
And then once that order gets filled (and I get $169 premium), can't I just issue another limit order to buy to close for 1.51 (costing me $151), which leaves a nice $18 profit?
Basically, I can't understand why the spreads on options are so large.
Submitted July 30, 2017 at 04:28AM by JK_Business_Casual http://ift.tt/2uNmTfb
