Use the Bid-Ask Spread to Never Overpay for a Stock Again

I walked away from the perfect home, and it was the right choice.

My wife and I had been shopping for about a year when we got the showing we’d been waiting for.

It was on a quiet street, had four bedrooms, a pool and impact windows (something that is a must living in Florida).

But we passed on buying it…

After doing our research into its value, we realized the seller was way off … tens of thousands of dollars off.

Sellers usually negotiate some, but when we put in a fair offer, this one flat out rejected it.

At the end of the day, me and the seller didn’t see eye to eye on the value of the home. And I wasn’t willing to compromise.

In finance, we call this a “mispricing.” This is how we find a lot of our trades in Weekly Options Corner (and in our sister newsletter, American Investor Today). But this mispricing was in the wrong direction.

Now, normally, we want to buy things when the seller is valuing them very cheaply. But when a seller thinks something is worth way more than it is … then we have to have the confidence to walk away.

Mispricings — both good and bad — happen every day in the options market.

Using the “Bid-Ask” Spread

Many options are listed too high, and if you don’t do the research, you’ll quickly be sucked into overpaying for the trade you want to make.

Here’s how to avoid those pitfalls…

Options use similar language to real estate. The prices we’re talking about are called the “bid” and the “ask.”

The bid is the price a buyer is willing to pay for the option right now. The ask is the price the seller is willing to take for that option right now.

So the buyer places a bid, and the seller decides whether they want to take it. The seller also lets the buyer know the price they’re willing to sell the option for.

When you go to place an order for an option, your broker will show you the recent bid and ask prices — essentially showing you what the market is valuing these options at.

They call the difference between the bid and ask prices the “bid-ask spread.” And in general, what options traders want is a tighter bid-ask spread.  Think about it: You’re more likely to have your bid on a house accepted when it’s closer to the seller’s asking price. Ideally, you want that difference to be very small.

If the spread is too wide, it can cause nightmares for your portfolio. It’s a sign the market is out of whack on the option. If you aren’t careful, you can end up paying far too much (or selling for far too little). We recommend you don’t go after options with large bid-ask spread unless you really know what you’re doing.

These stocks are going to have the most heavily traded options — the ones with a very tight bid-ask spread — indicating that there are plenty of buyers and sellers for those option contracts.

Here’s what I mean…

Focusing on the Spread

When I first started to do the research into my No. 1 options service, Quick Hit Profits, I knew I wanted to recommend options on stocks with these “liquid” options — those are options that have a lot of people trading them.

I knew many cheap stocks and penny stocks were not going to have many easy-to-trade options.

Right out of the gate, I limited my scope to stocks with the most liquid shares in the world — the S&P 500. That’s 500 of the largest stocks in the U.S.

Liquid shares translate into liquidity for options, too. That means we don’t have to pass on a potential profit opportunity just because the options have wide spreads.

Close bid-ask spreads guarantee easy trades and exits.

That’s the key.

By using my Profit Trigger and only looking at these specific stocks, I’m setting myself up to win. If you have a profitable strategy to follow, all you have to do is place the trades it generates to get some of the best profit opportunities.

The truth is, we walked away from what we thought was the perfect house that day. But about a year later, we stumbled upon a true “forever home,” as my wife calls it — one that was bigger and even more beautiful than the one we walked away from.

Some opportunities are meant to be passed up.

Use the bid and the ask to help you identify the ones to avoid.

That’s all for today.

I plan on walking you through a live trade in the coming weeks. We have been busy this earnings season with new trades, and I want you to see what the action is all about.

I’ve also spoken with my publisher, and he’s let me create a special offer just for Weekly Option Corner readers.

I’m excited to share that with you soon as well.

In the meantime, keep your questions coming in. You can send them to our team at WeeklyOptionsCorner@BanyanHill.com.

Regards,

Chad Shoop, CMT

Editor, Automatic Profits Alert

Previous Post
Next Post

Comments

asmr https://0mniartist.tumblr.com

Thanks for any other great article. The place else may anyone get
that kind of info in such an ideal way of writing? I’ve a presentation subsequent week, and I’m
at the look for such information. asmr 0mniartist

asmr https://0mniartist.tumblr.com

I have learn some just right stuff here. Definitely value bookmarking for revisiting.
I wonder how much attempt you put to make this
kind of great informative website. asmr 0mniartist

bitly.com

WOW just what I was looking for. Came here by searching for asmr
0mniartist asmr

bitly.com

Thank you for the good writeup. It in fact was a
amusement account it. Look advanced to more added agreeable from you!
However, how can we communicate? asmr 0mniartist

but gamefly

It’s really very difficult in this active life to listen news on Television, therefore I simply use internet for that reason, and
get the latest news.

asmr or

Generally I don’t learn article on blogs,
however I would like to say that this write-up very compelled me to
take a look at and do so! Your writing taste has been surprised me.
Thanks, very great article.

the asmr

hello!,I like your writing so a lot! percentage we communicate extra about your
article on AOL? I need a specialist in this house to unravel my problem.
May be that is you! Having a look forward to look you.

an asmr

I always spent my half an hour to read this weblog’s
content everyday along with a cup of coffee.

asmr was

Good day! This is my first comment here
so I just wanted to give a quick shout out and tell you I truly
enjoy reading your blog posts. Can you recommend any other blogs/websites/forums that go over the same topics?
Thanks!

tinyurl.com

Genuinely no matter if someone doesn’t know afterward its up to
other visitors that they will assist, so here it happens.

asmr my

Hi to all, how is the whole thing, I think every one is getting more from this website, and your views are nice for new people.

asmr but

Hi, I log on to your new stuff daily. Your story-telling style is awesome,
keep up the good work!

http://j.mp/3btxNgG

scoliosis
I read this article completely about the resemblance of hottest and
previous technologies, it’s awesome article. scoliosis

Markson

[url=https://viagracialisshop.com/]viagra prescription online usa[/url] [url=https://viagra36.com/]safe online viagra[/url] [url=https://viagraemed.com/]brand viagra[/url] [url=https://tadalafilcialispills.com/]cialis 2.5 mg price comparison[/url]

storno brzinol

Its like you read my mind! You seem to know a lot about this, like you wrote the book in it or something. I think that you could do with a few pics to drive the message home a bit, but other than that, this is fantastic blog. A great read. I will definitely be back.

Ernlig

priligy 90mg – can you purchase cialis over the counter buy cialis over the counter canada

Ahdfyd

dr oz erectile dysfunction pills – what causes erectile dysfunction best place to buy ed pills online

Udwmxx

prednisone 40 mg cost – prednisone otc canada prednisone cream brand name

Qcmjsd

provigil generic – modafinil alternatives modafinil and caffeine

Unnfgp

can i buy accutane online – accutane 40mg capsule accutane generic

Vmhutp

amoxicillin without a doctor – Amoxil online antibiotics without a doctor‘s prescription

Hvachx

vardenafil 10mg – vardenafil wiki vardenafil generic

Zsvfck

ivermectin 0.5 lotion india – buy stromectol 3mg ivermectin 0.1

Xurvsl

cialis 40 mg price – generic tadalafil in canada tadalafil compare prices

Ewbpyv

stromectol 3 mg price – ivermectin buy canada ivermectin nz

Dxovxh

cheapest accutane generic – how to get accutane australia accutane nz

Givhiy

lyrica 75 mg capsule price – canadian pharmacy victoza canadian online pharmacy cialis

Cocuyn

amoxicillin for uti – purchasing amoxicillin online amoxil 250

Dvcfcj

viagra prescription cost canada – how to purchase viagra in india viagra pill price in india

Ciwybx

buy cialis online in india – cialis 5mg daily cost over the counter cialis usa

Igvaav

purchase oral ivermectin – ivermectin 12 ivermectin medicine

Uzqxvm

prednisone pills for sale – prednisone drug buy deltasone no prescription

Chneqm

modafinil reviews – provigil for adhd modafinil adhd

Vpkurz

generic zithromax over the counter – generic zithromax 100mg buy generic azithromycin 100mg

Vsuzxx

20 mg furosemide – buy lasix in the uk 220 lasix

Zlzzio

cheap clomid – clomiphene tablets clomid 100mg

Ozzzpe

can you buy viagra over the counter australia – sildenafil 200mg online generic viagra 100mg best price

Rabswp

prices pharmacy – tadalafil price buy cialis no script

Diuwgb

ivermectin 1 cream generic – ivermectin 6 tablet cost stromectol

RonaldVep

buy viagra discreetly genetric viagra – best viagra sale sites

Ekpxqd

online casino no deposit bonus – online casino real money usa win real money online casino for free

Markson

[url=https://xytabs.com/]azithromycin 250 mg pill[/url]

Prlukl

ed pills online malaysia – male ed pills cvs ed pills

FloydSkene

zithromax online paypal zithromax for sale – zithromax 250 price

Qxlzzt

prednisone 12 tablets price – prednipsone.com canine prednisone 5mg no prescription

Mkyqfp

get viagra prescription online – rx viagra sildenafil canada otc

RonaldPlene

stromectol tablets for humans ivermectin 12 mg tablets for sale – stromectol 6 mg tablet

Tgvjzk

tadalafil prescription us – Real cialis without prescription order cialis in canada

Azqcvv

ivermectin lotion 0.5 – buy ivermectin for humans uk ivermectin 8000

Eydirt

erectile dysfunction doctors near me – mens ed can you buy ed pills online

Lzaibr

generic ventolin – ventolin 100 mcg buy albuterol online

Eyclzn

can i buy cytotec without prescription – how to get cytotec buy cytotec online south africa

ps4 games it

I was able to find good information from your articles.

with ps4 games

constantly i used to read smaller articles or reviews which as well clear their motive,
and that is also happening with this piece of writing which I am reading
at this place.

ps4 games that

Thanks for a marvelous posting! I truly enjoyed reading it, you happen to be
a great author. I will make sure to bookmark your blog and may come
back at some point. I want to encourage you
continue your great writing, have a nice holiday weekend!

Homfvi

doxycycline order uk – cheapest doxycycline without prescrtiption how to buy doxycycline online

Ocpwdg

brand neurontin 100 mg canada – gnsynthroid price for levothyroxine 112 mcg

Stiqxg

viagra canada fast shipping – sildenafil otc canada

viagra with dapoxetine online

Purchase Viagra From Pfizer

web hosting an

Helpful information. Fortunate me I found your web site by accident, and I’m stunned why this coincidence didn’t happened
in advance! I bookmarked it.

Gwotne

cialis viagra comparison – tadalafil cost blue chew cialis

Qtgyps

can you buy vardenafil over the counter – vardenafil online us pharmacy buy vardenafil from canada

bitly.com

You really make it seem so easy with your presentation but I find this topic
to be actually something which I think I would never
understand. It seems too complicated and extremely broad for me.
I am looking forward for your next post, I’ll try to
get the hang of it!

MauriceDen

propecia buy buy propecia – buy propecia no prescription

Oahnji

stromectol 15 mg – buy ivermectin canada

http://bitly.com/3gI6uSo

This piece of writing provides clear idea for the new visitors of
blogging, that in fact how to do blogging.

Szutma

prednisone 50 mg – where to buy prednisone without a prescription can you buy prednisone in canada

MauriceDen

buy prednisone online australia cheap prednisone – where can i buy prednisone

j.mp

I am actually thankful to the holder of this
web site who has shared this wonderful piece of writing at at this place.

Affiliate Marketing

Wow, incredible weblog layout! How long have you ever been running a blog for? you made blogging glance easy. The whole glance of your site is great, let alone the content material!

and scoliosis surgery

When some one searches for his necessary thing, thus he/she needs
to be available that in detail, thus that thing is maintained over here.

Xzezgs

accutane for sale online – how to get accutane online accutane 40mg

asmr a

Hey I know this is off topic but I was wondering if you knew of any widgets I could
add to my blog that automatically tweet my newest twitter updates.
I’ve been looking for a plug-in like this for
quite some time and was hoping maybe you would
have some experience with something like this. Please let
me know if you run into anything. I truly enjoy reading your blog and I
look forward to your new updates.

MauriceDen

zithromax tablets zithromax antibiotic – zithromax 250 mg australia

Anmjme

amoxicillin 500 mg dosage – gnamoxil amoxil 500mg

tinyurl.com

I could not resist commenting. Well written!

propecia before and after reddit

Viagra For Sale In Usa Stores

my asmr

WOW just what I was looking for. Came here by searching
for your

with scoliosis surgery

I constantly spent my half an hour to read this weblog’s articles everyday along with
a mug of coffee.

furosemide 80 mg

furosemide tablets 40 mg for sale buy furosemide vot Glulp

quest bars an

I’m not that much of a online reader to be honest but your blogs really nice, keep it up!
I’ll go ahead and bookmark your website to come back down the
road. All the best quest bars http://j.mp/3C2tkMR quest bars

app.gumroad.com

Hi there everyone, it’s my first visit at this site, and post is really fruitful designed for me, keep up posting these articles.

asmr https://app.gumroad.com/asmr2021/p/best-asmr-online asmr

Vxbqlu

order stromectol online – ivermectin for people stromectol over the counter

furosemide goodrx

furosemide rx furosemide 20 mg tablet buy online vot Glulp

bit.ly

You can certainly see your enthusiasm in the work you write.

The sector hopes for more passionate writers such as you who are not afraid to say how they believe.
All the time follow your heart. scoliosis surgery https://0401mm.tumblr.com/ scoliosis surgery

http://bitly.com/3nkdKIi

Hmm is anyone else having problems with the images on this blog loading?
I’m trying to figure out if its a problem on my end or
if it’s the blog. Any feedback would be greatly appreciated.
ps4 https://bit.ly/3nkdKIi ps4

bit.ly

I’d like to find out more? I’d love to find out more details.
cheap flights http://1704milesapart.tumblr.com/ cheap flights

Ihjmhz

prednisone 50 mg prices – prednisone 1 mg tablet prednisone 50 mg buy

http://coub.com/stories/962966-scoliosis-surgery

At this time it appears like Drupal is the top blogging platform available
right now. (from what I’ve read) Is that what you are using on your blog?
scoliosis surgery https://coub.com/stories/962966-scoliosis-surgery scoliosis
surgery

www.iherb.com

You actually make it appear so easy together with your
presentation but I in finding this topic to be actually one thing
that I think I would never understand. It kind of feels too complex and extremely broad for me.
I am looking forward to your next post, I’ll attempt to
get the dangle of it! quest bars https://www.iherb.com/search?kw=quest%20bars quest bars

trend topic satın al

I Learned My Stalkers

Priligy

Cialis 5 20

Tenteetom

http://buylasixshop.com/ – furosemide nursing implications

ivermectin price

stromectol ivermectin stromectol 15 mg

Apelppiob

http://buyzithromaxinf.com/ – zithromax with out prescription

furosemide 40 mg

Metoprolol

Plaquenil

Want To Buy Direct Macrobid Low Price

Zithromax

Levitra Prezzo In Erboristeria

Xvbijp

stromectol 6mg – ivermectina online cost of stromectol

Rpimfp

where to buy stromectol – site ivermectin india

Yewgqt

canadian pharmacy sildenafil – buying sildenafil online sildenafil online pharmacy

Opcxbs

tadalafil citrate – tadalafil generique tadalafil 10mg

Lciafe

buy accutane online cheap canada – buy accutane online from europe buy accutane singapore

Leave a Reply

Your email address will not be published.