How to calculate bid-ask spread is more than 20% of options price (Eg. $0.14 per share)

Michane

04-02

1. Manual Calculation Framework:

Bid-Ask Spread % = [(Ask - Bid) / Mid-Price] × 100

Example: If Bid = $0.08, Ask = $0.11 → Mid = $0.095 → Spread = 31.6% ($0.03 / $0.095).

Your entry price ($0.14) vs. current mid-price determines your unrealized P&L.

2. Actionable Advice

Check Liquidity: Low open interest (e.g., < 50 contracts) implies high slippage risk.

Roll Options: If spread >20%, consider rolling to a higher-liquidity strike/expiry.

Limit Orders: Place orders near mid-price to avoid unfavorable fills.

Critical Note:

Options with wide spreads (>20%) often reflect low trader confidence or impending volatility. Verify the stock price trend and news catalysts before adjusting positions.

Disclaimer: This analysis assumes hypothetical bid-ask values due to data limitations. Confirm actual quotes via your brokerage platform.

When I Asked TigerGPT___, It Said___

On February 18, 2025, TigerGPT officially integrates the DeepSeek-R1 model, bringing advanced reasoning capabilities to online Q&A. Now, we invite you to participate in our "AI-Powered Investment Insights" event! Share your experiences using AI-powered research tools on Tiger Brokers, tell us your expectations for TigerGPT, and let us know what features you’d love to see. Your ideas and feedback will help us continue improving our product and delivering the best AI-driven investment experience for you!

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":419988347023640,"tweetId":"419988347023640","gmtCreate":1743567918604,"gmtModify":1743568175663,"author":{"id":4091891386414570,"idStr":"4091891386414570","authorId":4091891386414570,"authorIdStr":"4091891386414570","name":"Michane","avatar":"https://static.tigerbbs.com/e34d5ed60a80aa56ff9a8771c943602c","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":6,"crmLevelSwitch":1,"currentWearingBadge":{"badgeId":"9427a906234c4b18a82ec3d7730b7fa8-1","templateUuid":"9427a906234c4b18a82ec3d7730b7fa8","name":"Star Contributor","description":"Published at least 3 PICK posts (or 10 IDEA posts) and, within the past 30 days, posted at least 1 PICK post (or 4 IDEA posts) and 1 comment","bigImgUrl":"https://community-static.tradeup.com/news/1866dcf97a73be1c330f85862546aedc","smallImgUrl":"https://community-static.tradeup.com/news/4f5c5fa8e2c7683bb5a7fce8753ee456","redirectLinkEnabled":1,"redirectLink":"https://ttm.financial/activity/market/2023/star-contributors/","hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2023.12.17","individualDisplayEnabled":0},"individualDisplayBadges":[{"badgeId":"9427a906234c4b18a82ec3d7730b7fa8-1","templateUuid":"9427a906234c4b18a82ec3d7730b7fa8","name":"Star Contributor","description":"Published at least 3 PICK posts (or 10 IDEA posts) and, within the past 30 days, posted at least 1 PICK post (or 4 IDEA posts) and 1 comment","bigImgUrl":"https://community-static.tradeup.com/news/1866dcf97a73be1c330f85862546aedc","smallImgUrl":"https://community-static.tradeup.com/news/4f5c5fa8e2c7683bb5a7fce8753ee456","redirectLinkEnabled":1,"redirectLink":"https://ttm.financial/activity/market/2023/star-contributors/","hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2025.04.16","individualDisplayEnabled":1,"backgroundColor":{"dark":"#675a37","tint":"#f9ebc2"},"fontColor":{"dark":"#ffffff","tint":"#ab7a0e"}}],"fanSize":3107,"starInvestorFlag":false},"themes":[{"themeId":"32056b3a947442b69e13b08d6d7f82b4","categoryId":"ab3d937a5fd848c08008411a9be702b5","name":"When I Asked TigerGPT___, It Said___","type":0,"rnLink":"https://laohu8.com/RN?name=RNTheme&page=/theme/detail&rndata={\"themeId\":32056b3a947442b69e13b08d6d7f82b4}&rnconfig={\"headerBarHidden\": true}","description":"On February 18, 2025, TigerGPT officially integrates the DeepSeek-R1 model, bringing advanced reasoning capabilities to online Q&A. \nNow, we invite you to participate in our \"AI-Powered Investment Insights\" event! Share your experiences using AI-powered research tools on Tiger Brokers, tell us your expectations for TigerGPT, and let us know what features you’d love to see. Your ideas and feedback will help us continue improving our product and delivering the best AI-driven investment experience for you!","image":"https://community-static.tradeup.com/news/e7a75dcea897bfa06e815341694434c9"}],"images":[],"coverImages":[],"title":"How to calculate bid-ask spread is more than 20% of options price (Eg. $0.14 per share)","html":"<html><head></head><body><h3>1. Manual Calculation Framework:</h3>\nBid-Ask Spread % = [(Ask - Bid) / Mid-Price] × 100\nExample: If Bid = $0.08, Ask = $0.11 → Mid = $0.095 → Spread = 31.6% ($0.03 / $0.095).\nYour entry price ($0.14) vs. current mid-price determines your unrealized P&amp;L.\n<h3>2. Actionable Advice</h3>\nCheck Liquidity: Low open interest (e.g., &lt; 50 contracts) implies high slippage risk.\nRoll Options: If spread &gt;20%, consider rolling to a higher-liquidity strike/expiry.\nLimit Orders: Place orders near mid-price to avoid unfavorable fills.\nCritical Note:\nOptions with wide spreads (&gt;20%) often reflect low trader confidence or impending volatility. Verify the&nbsp;stock price trend and news catalysts before adjusting positions.\nDisclaimer: This analysis assumes hypothetical bid-ask values due to data limitations. Confirm actual quotes via your brokerage platform.&nbsp;</body></html>","htmlText":"<html><head></head><body><h3>1. Manual Calculation Framework:</h3>\nBid-Ask Spread % = [(Ask - Bid) / Mid-Price] × 100\nExample: If Bid = $0.08, Ask = $0.11 → Mid = $0.095 → Spread = 31.6% ($0.03 / $0.095).\nYour entry price ($0.14) vs. current mid-price determines your unrealized P&amp;L.\n<h3>2. Actionable Advice</h3>\nCheck Liquidity: Low open interest (e.g., &lt; 50 contracts) implies high slippage risk.\nRoll Options: If spread &gt;20%, consider rolling to a higher-liquidity strike/expiry.\nLimit Orders: Place orders near mid-price to avoid unfavorable fills.\nCritical Note:\nOptions with wide spreads (&gt;20%) often reflect low trader confidence or impending volatility. Verify the&nbsp;stock price trend and news catalysts before adjusting positions.\nDisclaimer: This analysis assumes hypothetical bid-ask values due to data limitations. Confirm actual quotes via your brokerage platform.&nbsp;</body></html>","text":"1. Manual Calculation Framework: Bid-Ask Spread % = [(Ask - Bid) / Mid-Price] × 100 Example: If Bid = $0.08, Ask = $0.11 → Mid = $0.095 → Spread = 31.6% ($0.03 / $0.095). Your entry price ($0.14) vs. current mid-price determines your unrealized P&L. 2. Actionable Advice Check Liquidity: Low open interest (e.g., < 50 contracts) implies high slippage risk. Roll Options: If spread >20%, consider rolling to a higher-liquidity strike/expiry. Limit Orders: Place orders near mid-price to avoid unfavorable fills. Critical Note: Options with wide spreads (>20%) often reflect low trader confidence or impending volatility. Verify the stock price trend and news catalysts before adjusting positions. Disclaimer: This analysis assumes hypothetical bid-ask values due to data limitations. Confirm actual quotes via your brokerage platform.","highlighted":1,"essential":1,"paper":2,"likeSize":3,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/419988347023640","repostId":0,"isVote":1,"tweetType":1,"viewCount":42,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":708,"optionInvolvedFlag":true,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/419988347023640"}