Post #185 by rivervalley on the Falling Knives board

Investment Strategies / Falling Knives

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Thanks for this idea, Jim

As an options newbie, but with an inclination to sell puts on companies that I'd be interested in owning anyway, this seems like worth considering.

Here's a basic question - the bid ask spread listed on Schwab is 2.35/6.30 with last trade at 4.30; open interest 180.

Coming from standard equity trading this seems like an enormous spread. Is this typical for a small cap name? Or a function of the relatively small amount of open interest? BY comparison, the spread on June puts of Brk 340 are 14.0 / 14.85. Does it matter much or do the options usually end up trading hands in the middle regardless of the listed bid and ask prices...

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