Post #2207 by elann on the Mechanical Investing board

Investment Strategies / Mechanical Investing

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bid 0.45, ask 0.60. That's 33% spread. Ugh.
Last trade yesterday 0.55.

But Schwab, Etrade, IBKR -- all charge $0.65 per contract. That would more than double the price!

Umm, I don't think so. When the ask for an option contract is 0.60, you're actually buying a contract for 100 shares at $60.00. So the commission is 1% of the buy price.

It does get expensive, theoretically, when the bid on one of my options drops to 0 and I ultimately manage to scrape $0.05 out of it. But then Fidelity usually waives the commission.

Elan

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