How Option Makers "Close The Door" On Afternoon Last Day Option Trading"
This is something which affects retail option traders which I have never really paid much attention to before. Option makers steer option traders away from chasing the option market between 1:00 p.m. to 3:00 p.m. on "last-day-Friday-afternoon-options". It's particularly noticable on certain stocks like Exxon. I 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 t...
