Author Topic: AAPL mini options  (Read 1413 times)

goodrookie

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AAPL mini options
« on: December 22, 2014, 06:24:19 PM »
What happened to those? why are there many options with zero or extremely low bids? E.g. AAPL April option at 115 is 6.10 for regular option but only 0.50 for mini options? And @120, the mini option bid is zero!

Someone please explain.

LordSquidworth

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Re: AAPL mini options
« Reply #1 on: December 22, 2014, 08:09:37 PM »
^^ Likely better off staying away from options.

The mini options aren't really desirable anymore. Low to no bid means no demand for them. Mini options were meant to let smaller fish into the pond. They were only interesting when AAPL had a per share cost in the hundreds, now they don't, and big fish or small fish can be in the pond with the regular options.

goodrookie

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Re: AAPL mini options
« Reply #2 on: December 23, 2014, 03:56:53 PM »
thanks for the reply. but why the sudden change? mini options have been for ~ 1 year. Not just AAPL but SPY, GLD etc all are running at zeros. I am quite sure someone will take the option if the price is low enough. It simply does not make why so many of them are at zero! Are the brokers banning them without notifying their customers?

Mini option has slightly bigger transaction cost. but premium difference from regular option itself should be worth it.
e.g. January 17 2015 SPY @ 210 is 1.51 but mini is zero!
shouldn't supple and demand create a market?


KingCoin

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Re: AAPL mini options
« Reply #3 on: December 23, 2014, 04:58:10 PM »
The key question is, where is the bid and where is the offer?

I pulled up the mini Apr 115c in Bloomberg and it looks like they're pretty much offer only around $6. Whatever pricing source you're using might just be marking them a bid side, which in this case is 0. No one will sell them to you at 0 of course.

Why don't people trade these? Probably because there's no way to hedge yourself in the liquid market except with normal delta hedging which probably isn't worth the trouble for such a small trade size.
« Last Edit: December 23, 2014, 09:12:39 PM by KingCoin »