The BID-ASK in Trading Options can Make or Break Ya | Adam Answer…

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40 thoughts on “The BID-ASK in Trading Options can Make or Break Ya | Adam Answer…”

  1. At 4:15 you mentioned that the bid-ask spread goes to the exchange as compensation for meeting the buyer and seller. Don't think this is correct.

    I'm pretty sure the bid-ask spread is just what the buyer & sellers and market makers are willing to trade at. At times of higher volatility, market makers will widen the spread to compensate. There will also be times when market makers fix the bid ask i.e. market makers don't like to lose money.
    Exchanges make their money for matching orders via the maker-taker model, with the exception of IEX. Depending on the exchange, the maker or taker of liquidity will be charged a fee or given a rebate. Obviously, the fee will be greater than the rebate. Exchanges don't really care about the actual price of the stock. They make money via trading volume, data, co-location, and etc.

  2. What is a good metric to track when selling options that are low liquidity, since the volume/spread changes so frequently? I sold an IC for a good amount of premium at about .12 delta on each side. I am having trouble tracking how well it is doing because of the changes in volume/spread. Is there a way to tell via greeks how well the position is doing?

  3. mmm. a lot of incorrect info in this. the "(price) x (number)" is also not "number of buyers" but number of shares * 100

  4. This definitely helped me I was up 500 percent then it dropped to 20 percent I was so confused now I know why thank you

  5. How does the bid-ask spread affect spreads? For example if I sell a call at the ask price and buy the lower strike…the spread between the bid/ask of the two strikes. How does that affect premium or debit?

  6. BROOOO, I literally dropped my pen seconds before you did in your video I SHIT YOU NOT haha. gave me chills hahaha. Guess I am the right spot in this moment ahaha

  7. What does it mean to change my option premium price every day? As of January 20th next year, I paid $4.13 for the stock called NIO, but now the price is $4.10. So what's the point of changing the option premium price when I can't even buy 100 shares of NIO until January 20th when I saw I'm losing $10 in my robinhood account? And there's something called excise, and I want to know what it means.

  8. Good video Thanks im watching a few stocks and one company just bought another Pharmaceutical company. Oh wow with a bit of research I found out the buyer and ive watched the stock all week to see regrow fast!

  9. What is the name of the website you went to in one of your videos to help you find low priced high volatility stocks?

  10. I was green $90 sold at market and it went -$86. Bid .89 Ask 3.15. stock was XSP, so I guess my lesson I learned was never exit a trade at market.

  11. would i still receive the premium from robinhood for putting my limit price at the ask price?
    bid is $0 Ask is $0.65. i set my limit price to 0.65 so i hope that gets accepted when the market is back up. thanks in advance. (trying to sell call options)

  12. Idk what to do I had a limit price from like 0.05 to 1.20 I tried to sell 1.20 then canceled and did 1.10 and it only said placed and I know it won't go thought cause it's happened before when it said place am I doing something wrong the 1.20 had about 1000 next to it

  13. When I sell to close an option and buy to open the same option but extend it another month out

    How can I find the midpoint between the bid and the ask if the spread between them is represented

    as two negatives numbers or sometimes one positive # and one negative #

    Ex.1 Bid -310 Ask 130 = ?

    Ex2 Bid –140 Ask -60 = ?

    Im on TDS web site not think or swim

  14. I bought a call yesterday at market closing. Today, the bid price hit 0 and my options value decreased to 1 cent. I then saw the bid rise to 5cents, then back down to 0. Can you explain to mw what is happening?

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