Pricing & Volatility
Without a doubt we get our "edge" as options traders by mastering options pricing and volatility. Specifically the fact that long-term implied volatility always overstates the expected market move.
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Bid-Ask Spread Defined

The bid-ask spread effects the prices you pay for an option. The "slippage" in the market is important as we continue to build on our understanding of why trading liquid markets is important.
Bid-Ask Spread Defined
Kirk Du Plessis
Apr 19, 2021

The stock market is the biggest and most efficient live auction on the planet. But even within this huge market there are very illiquid markets for particular stocks that aren't as popular as say some of the big names; AAPL, GOOG, TWTR, etc. Recognizing and understand how the bid-ask spread effects the prices you pay for an option and the "slippage" in the market is important as we continue to build on our understanding as to why trading liquid underlying is important. Wide markets with regard to bid/ask spread can be extremely detrimental to your success and most traders fail to recognize it before it's too late.

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IV Expected vs. Actual Move
One of the ways we gain an "edge" in the market selling options is because IV tends to overstate the actual expected move of a stock.

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