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- 30 November 2009
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I have been reading about this online and I have come across a number of ways people use this.
some say don't trade an option if it's open interest is less than 2000 or 5000 etc etc
some say if ask/bid spread is narrow then ignore open interest because open interest takes time to go up.
I was wondering what people would recommend... when you want to sell an option and want it to stay open till expiration. isn't the open interest then just useless?
Some options like the deep in the money calls hardly have any Open interest. what then of Open interest? How would someone analyse liquidity of a deep in the money call they want to sell.
Cheers,
some say don't trade an option if it's open interest is less than 2000 or 5000 etc etc
some say if ask/bid spread is narrow then ignore open interest because open interest takes time to go up.
I was wondering what people would recommend... when you want to sell an option and want it to stay open till expiration. isn't the open interest then just useless?
Some options like the deep in the money calls hardly have any Open interest. what then of Open interest? How would someone analyse liquidity of a deep in the money call they want to sell.
Cheers,
