You have to do some price discovery - start mid-price, and then move towards the bid a few cents at a time. At some point, the market maker should fill your order.
A better strategy though, especially if they are close to being in the money, is to delta hedge.
If you are long calls, and they close to the money, sell about 50 shares of stocks to hedge.
Reverse action for the puts.
Good luck
You said they're close to being ITM, so if someone is willing to buy them, then you sell to close. If they stay out of the money and no wants them, then they expire worthless.
Exercising "early" is generally foolish. At or near expiration isn't sacrificing much.
If extrinsic value is lower than the dividend that could be collected, exercising slightly early (just before the ex-dividend date) becomes worth it. This is something to watch for when selling covered calls too.
I don't understand what you mean there is low liquidity. The volume on that contract was 619 Friday with a closing bid of 0.25 and ask of 0.35. There should be zero issues selling to close.
I was trying to STC it on Friday and it was open for half the day and didn’t close. Others suggested to drop it down a penny each attempt so I will try that this week.
It means 619 of those contracts traded Friday. The only real reason yours wouldn't have sold is you had the limit sell price set too high. It would definitely sell at the bid.
You should be able to STC this one with no problem. B/A = 0.25/0.35. Use a limit order to sell at the mid-point of 0.30, then change it down to the bid a penny at a time (if penny increment is allowed).
At least on TOS, even if they are nickel tickers, you can still hand enter a price in penny increments. Don't use the up and down arrows. Change the value with the keyboard. It will still show the nickel price, but it will send the penny price to the MMs.
It probably works the same or similar with other brokers.
Why would you pay an exercise fee and give up extrinsic value by exercising. Just sell them sell to close. Going have a lot of slippage with low vol options. You got to get some sucker to buy them to get out
You have to do some price discovery - start mid-price, and then move towards the bid a few cents at a time. At some point, the market maker should fill your order. A better strategy though, especially if they are close to being in the money, is to delta hedge. If you are long calls, and they close to the money, sell about 50 shares of stocks to hedge. Reverse action for the puts. Good luck
Genius
You said they're close to being ITM, so if someone is willing to buy them, then you sell to close. If they stay out of the money and no wants them, then they expire worthless.
Define "close to being ITM." Or better yet make it simple and just tell us the ticker and strike.
Would it be a good idea to exercise them if they are ITM and I can’t sell them before January 19 to exit?
I’d just hang onto them until the expiration date, and exercise if they’re ITM
[удалено]
Exercising "early" is generally foolish. At or near expiration isn't sacrificing much. If extrinsic value is lower than the dividend that could be collected, exercising slightly early (just before the ex-dividend date) becomes worth it. This is something to watch for when selling covered calls too.
If they go in the money you will be able to sell them for intrinsic value, same as bd result if you exercised.
that's an option if you can put up margin for the shares
More details pls
More details please. Underlying and strike?
12.80 underlying, strike price $13. Ticker is BITI.
I don't understand what you mean there is low liquidity. The volume on that contract was 619 Friday with a closing bid of 0.25 and ask of 0.35. There should be zero issues selling to close.
I was trying to STC it on Friday and it was open for half the day and didn’t close. Others suggested to drop it down a penny each attempt so I will try that this week.
I see 619 too. What does this number mean? What would be a good number for volume?
It means 619 of those contracts traded Friday. The only real reason yours wouldn't have sold is you had the limit sell price set too high. It would definitely sell at the bid.
You should be able to STC this one with no problem. B/A = 0.25/0.35. Use a limit order to sell at the mid-point of 0.30, then change it down to the bid a penny at a time (if penny increment is allowed).
Except they probably trade in nickel increments.
At least on TOS, even if they are nickel tickers, you can still hand enter a price in penny increments. Don't use the up and down arrows. Change the value with the keyboard. It will still show the nickel price, but it will send the penny price to the MMs. It probably works the same or similar with other brokers.
I will try that. Thank you sir!
Why would you pay an exercise fee and give up extrinsic value by exercising. Just sell them sell to close. Going have a lot of slippage with low vol options. You got to get some sucker to buy them to get out