Many times when I want to buy an option I see there's a 10% spread and I find myself at a loss on what to do. Trying to do it manually starting at the bid price and trying to move up is too messy and slow especially if the price is volatile in addition to large spreads. Which orders type/algo would be good for low volatility and high spread. And which would be good for the case of high volatility and high spread?
Best Algo/Order type for options with large spread?
byu/roydez inoptions
Posted by roydez
1 Comment
Option for what and for how many DTE?
As an example SPY and QQQ options have very tight spreads.
In general if im buying an option with a big spread i only do it for longer term stuff, very short term with large spread could leave you “Profitable” on paper without anyone to actually buy it from you at that price. That said, when i buy/sell high spread options i usually go with a midpoint price between the two and that tends to get a fill, but sometimes have to move it to be slightly biased towards the bid or ask. If need to abandon ship only then do a market order.