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Forum - Wall Street Pit (Caladrius Biosciences, Inc - CLBS)    Stock Due Diligence for All

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From: Bender24 (Rep: 213) reply to HARLUMDate: 05/23/2020 12:48
Forum: Wall Street Pit - Msg #2848935 - List CLBS msgs Thread #674115124 (Rec: 0)
Re: Im pretty new to options, only doing it a few years now , question , boug...

As a general rule of thumb, the thinner the volume, the greater the bid/ask spreads. Far OTM options will have a larger spread. If good news hits, it’ll increase the volatility (Vega) of the option and should increase the value. However it may not be enough to turn a profit if the bid/ask spread is still large. The closer to ATM you get, that spread should shrink. With long OTM options, time decay (theta) is your enemy.

I tend to be a seller of OTM options, so theta is my friend, and Vega is my enemy.

Sent from my IPhone



Reply to HARLUM - Msg #2848927 - 05/23/2020 11:06

Re: Im pretty new to options, only doing it a few years now , question , bought a few lotto calls here but I noticed options on all pricing have almost no volume and the spreads are crazy , if good new were to hit would the options still be rewarding or am I better off sticking to the commons in this scenario
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