How Option Makers Are Trying To "Close The Door" On Afternoon Last Day Option Trading"
This is something new that is affecting retail option traders which I have never really paid attention to before. I guess I am always learning. Option makers are taking steps to steer option traders away from chasing the option market from 1:00 p.m. to 3:00 p.m. on the "last-day-Friday-afternoon-options". It's only noticable on certain stocks like Exxon. I just came apon this after writing a blog about trading friday morning one day Call options on Exxon. Look at the "bid-and-ask" on this series of Calls on Exxon at 1:11.p.m. Look at how wide the spread is. Sixty one cents! That's crazy wide and if your stuck in a postion that you want to get out of at a fair price well good luck. Placing in a sell ticket by spliting the difference between the bid and ask would probably cause the bid to drop. This would force you to lower your asking price once again. In other words the liquidity is not there. This is in spite of it's mornings option trading being brisk. In all fairness there may be other reasons for these unusual price spread isssue which I am not privy to. News for example of world events which are getting amplified. That could be part of the issue. Here is what chatgpt says. . So yes option traders are closing the door on last day/last afternoon retail option traders. So yes option trading mechanisms are helping the house to hedge their bets. My most recent morning blog about Exxon Calls gives proof to what I am saying. Tesla afternoon one day Call and Put options can on the other hand prove to be different animals.
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