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The effect of vol on illiquid stocks. I can't tell if volatility affected the lack of movement in the price of this spread or the fact it is not very liquid. Only 500k volume today. In any case price dropped 2.14 and the spread dropped....0. If you want a laugh check out the spreads on the options. This is the drawback of using spreads in illiquid stocks with large bid/ask spreads. I shoulda just bought the 80P. At the bid/ask mid price the short put has 167 extrinsic , the long put has 0. It's like the 80 put's volatility increased as price dropped but the 85 put's volatility stayed at 0. I'm leaving a GTC in at 430 and hope for the best with a lesson learned.

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MississippiManMississippiMan
To be concise, the price of the stock dropped 2$ today, the long put gained 1.25, and the short put lost 1.65, for a net loss of .40 I bought this spread 2 days ago when the price of the stock was 78.90. I think I am finally realizing why you don't buy ITM spreads. 10/10/18
guccimoneyguccimoney
Avoid illiquid products... If you absolutely have to trade something illiquid, the less options the better. 10/10/18
guccimoneyguccimoney
Okay, what was the stock and what were your strikes? Is the bid/ask spread incredibly wide? 10/10/18
MississippiManMississippiMan
I knew it was a mistake when I did it but when I tried to short the stock the trade was rejected for some reason, something about very hard to borrow, live and learn. 10/10/18
MississippiManMississippiMan
SMG, the bid ask on the options is $3 wide anywhere near atm. 10/10/18
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MississippiMan

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