% | $
Quotes you view appear here for quick access.

Life Time Fitness Inc Message Board

you are viewing a single comment's thread.

view the rest of the posts
  • ntack5 ntack5 Feb 23, 2008 8:02 PM Flag

    Options spreads

    Volatility usually increases during periods of rapid market decline or advancement. At these times, the bid-ask spread is much wider because market makers want to take advantage of - and profit from - the change. When securities are increasing in value, investors are willing to pay more, giving market makers the opportunity to charge higher premiums. When volatility is low and uncertainty and risk are at a minimum, the bid-ask spread is narrow.

    Large spreads make more money for the market makers, but increase your risk b/c the price change of underlying security is either going to move quickly up or down and leave you holding the bag.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • I agree with your comments, although the bid/ask spread on LTM options has been large for a long time. I have been watching them for months and they have been large. I was going to buy some puts before earnings last week, but didnt (big mistake) I think this market maker is a bit greedy, they would probably have more volume if the spreads were more in line with most stocks. GOOG has smaller spreads and that stock is 500+

72.070.00(0.00%)Jun 10 4:00 PMEDT