So yesterday I bought 3 $10 10/18 put options for TERN while price was hovering $11.20. I'm in the money right now but there is no buyers. Is there a way I can still make profit from this? I know exercising the option is a route I could take but I'm not really sure what to do to profit in that scenario. Any help is needed thank you.
No buyers on my put options.
byu/AggressiveEnergy9000 inoptions
Posted by AggressiveEnergy9000
13 Comments
Maybe lowering your premium ask by a penny or two? That’s what I’d try.
The open interest is super low for that option. The best thing to do if you want to sell is to put in a limit order at a high price then slowly work your way down and keep the limit order there on GTC. Eventually, it’s likely to get filled when someone who is short the put needs to buy to close. The current “last price” is 1.15 on those options and market fill is sitting at 0.76 so you can expect to get filled somewhere around there.
The other thing you can do is to delta hedge to lock in profits. Buy stock equal to the delta to lock in profits. Here that means buying around 50 shares for each contract.
ladder your way down 5 cent increments
You can sell them at or under intrinsic or exercise them. Can’t force people to bid on your options.
Start creeping the price down until it fills. Good lesson to look at open interest and spreads before opening trade. Hope it works out for you
As of right now, TERN is over 10, so 10 strike puts are OTM. There is no bid, which is common on illiquid OTM options.
If they went ITM, there would be a bid and you would be able to sell, but you might have to sell at the bid or close to it.
Aside from the other comments pointing out low volume…
I’m guessing your cost was about $1.05/share. Realize that in order to be profitable on the option today, the stock must be below ~$9.75.
ITM <> profitable.
> . Is there a way I can still make profit from this?
If your particular strike won’t sell, you could always hedge by selling a different strike. If all strikes have low interest, you could buy or sell 100 shares individual stock to also hedge without needing to assign immediately
Just becasue there is no quoted bid, it does not mean there is no bid for your option. MM’s often quote a wider market in less liquid options, but their “real” market is much tighter.
Your 10 puts are showing a market of no bid/1.45. But look at the lower strike puts. The 9 puts are 70/.85. This tells you that the 10 puts are going to be bid higher than this. The “real” market on your puts currently is probably around 1/1.40.
To find the “real” bid offer 1 contract at 1.40 and lower the price until you are filled.
Always check volume on options…otherwise you risk holding the bag.
There’s always a buyer, just might get fucked on the transaction. A market maker will buy it for less than intrinsic and hedge the delta with the underlying. If the spread on the underlying sucks, the more screwed you get on the option exit.
low volume stock. if you’re in the money and the step down approach TheRealAlphaAction reccomends doesnt hit, just excercise it or risk a loss.
While there are 10,000 stocks, only 100-200 are decent option trading. Take a look at Tony at Tasty he sometimes talks about this.
https://www.youtube.com/watch?v=yQJLjqjATL0