Is It Okay to Trade Illiquid Options?
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Is It Okay to Trade Illiquid Options?

John F. Carter - Sept 15, 2016

There are pros and cons of trading illiquid options. The cons are obvious--wide spreads, hard to get out, and, if you get too much concentrated open interest in a near-term expiration, you can get targeted. The pros are there is a better chance for a better-than-expected move, and the often quoted hedge fund saying, "When you are on the right side of a trade, illiquidity becomes your best friend."