Questions tagged [spreads]
A spread ca refer to one of: * the difference between the bid and the ask price of a security. * an options position established by purchasing one option and selling another option of the same class but of a different series. * The difference between a financial measurement relative to some benchmark (e.g. credit spreads, Z-spreads)
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Credit Investing - Best Metric To Compare Spread / Yield Per Unit of Risk
Do people investing in credit (leveraged loans / high yield) that want to compare different industries / different valued businesses ever look at spread per turn of LTV (or the inverse, 1/LTV = asset ...
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How do Short Vertical Spreads work exactly?
I wanted to get into options trading and have been watching a couple of tutorials.All was well until I hit short vertical spreads.I used skyview trading resources for this.
https://www.youtube.com/...
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What's the difference between a commission fee and an artificially inflated spread when executing a trade?
I read on https://www.kitco.com/news/2022-11-29/Fidelity-Crypto-is-a-go-4-5-trillion-firm-launches-retail-crypto-trading.html:
The platform promises “commission free” crypto trades, but the company ...
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What is the spread between maturities called?
Credit spreads typically compare two bonds of the same maturity. For example, a 10-year US Treasury yielding 3% might be compared to a Corporate Bond yielding 4.5% and we'd say the spread was 1.5%.
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Can one earn only converting assets with different spread?
Can one earn only converting assets with different spread?
Example:
buy asset Y with asset X (i.e. BUSD/BTC)
buy asset Z with asset Y (i.e. BTC/BNB)
buy asset Y with asset Z (i.e. BNB/BUSD)
and get ...
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What if I roll the sold call of a Bear Call Spread?
In my exmample here, I'm talking about SPX Weekly spreads.
Say on Thursday I open a bear call spread expiring in 1 day on a Friday.
Now it's Friday morning, it's expiring today, and SPX has gapped up ...
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Broker executed market order far outside spread
I placed a buy market order during trade hours. The broker executed the order at a horrible price far outside the spread. The security's spread was wide, but I expected the order to be executed at ...
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Is there any difference between placing a "buy & sell call option" & "buy & sell put option"?
I have attached two Options order charts.
Max profit & loss are the same. But one (put) costs less than the other (call).
Is there any real difference between these two orders? Is there any real ...
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How can brokers profit from spread? [duplicate]
How can brokers profit from spread? Isn’t market makers that profit from spread?
And also how do brokers profit from OTC gain? How does that exactly work?
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Making a long put into a long put spread
Let's say I have a long put and it's Friday. I still think it has good potential to move down but I just want to be protected over the weekend in case the trade goes against me drastically because of ...
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Exiting a butterfly spread is hard
I have been watching webinars on butterfly spreads and in addition trading butterflies for about 6 months. Buying a butterfly is easy but exiting a position is rather hard. I have noticed even if my ...
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Choose between a Bull Call Spread and a Bull Put Spread?
I am looking into trading options with an eye towards something that I would eventually do as a business. For the purposes of this question, let's assume I am working with a modest portfolio, like $...
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When I buy a option spread with different calendar dates, should I close every leg manualy?
When I buy a option spread with different calendar dates (september, 10-17-24, october, 1), should I close every leg manualy or they will be closed automatically even if they expired ITM ?
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Do option spreads affect the holding period of the underlying stock?
Say I have 100 shares of ABC that are currently short-term.
If I sell an ABC put credit spread and close either or both legs within 30 days, would it reset the holding period on the 100 shares of ...
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Should I consider the bid-ask spread as part of the transaction cost of a market order?
When I place a market order or marketable limit order that successfully executes, should I consider the bid-ask spread as part of the transaction cost of my order? The bid-ask spread is appears to be ...
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Failed Iron Condor while market price was under Short Call Spread
Symbol is: SPY. My short call spread was at $412, and market price was $410.50... I was 100% in returns until RH closed my call spread for a negative $5,688... I do not understand what I did wrong ...
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Riskless Principal - how does it work?
I've read the Investopedia article on Riskless Principal and my understanding is that a broker/dealer gets an order from a client of buy or sell a security at say 10. Then at the same time the broker ...
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Price lands between Spread Strike on Expiration
Imagine this setup:
Sell put strike $10
Buy put strike $9
At expiration, the price is at 9.5 which should cause you to be assigned but your bought put won't execute.
However, if you're doing this on ...
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In over-the-counter markets, shouldn't price takers attempt to match each other's prices?
From what I understand, a market maker buys at bid price and sells at ask price, whereas the price taker involved with the market maker buys at ask price and sells at bid price. Basically, the market ...
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Mechanism of sudden bid-ask spread changes
Bid and ask chart are sometimes very different in its shape, like this bid chart and ask chart (USD/JPY, @OANDA platform).
At around 7:00AM on its ask chart, ask price ranges between 103.580 to 103....
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spx vertical bull put price selection
I just started trading SPX vertical bull put spreads. Had a few winners but am not sure about picking the right credit prices. It seems like system always recommends mid prices for opening or closing ...
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Waiting for Bid vs. Ask [duplicate]
Does a person make a profit when the bid price is higher than what was originally paid for the share? I know that you buy the ask, sell the bid, but if I ask to sell a share at a higher number than ...
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Spread calls in IRA retirement account and legal rules/regulations (USA)
I have an IRA account (USA) with Fidelity brokerage. I have an ability to do both Calendar and Vertical Spreads options in that particular retirement account.
Are there any legal rules and regulations ...
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Explaining different risk/reward ratios of bull put spreads with same strikes but different expirations
I've been looking at call spreads and put spreads and observed some vastly different risk/reward ratios even when the same spread width is used.
Can someone please explain these differences?
All ...
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How is it possible that these deep ITM stock options on DISH went from 52,000 volume, 550 open bids, 550 open asks to being completely dead overnight?
I bought 16 years of historical hourly stock options data for my personal investment study to test how particular strategies may have played out over a long period of time.
I'm looking at the data for ...
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What is causing large bid/ask spread in IEX top of book data?
I have been collecting data and experimenting with back testing algorithmic trading strategies. Admittedly I am not experienced in this domain and have been trying to build my understanding. I just ...
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What does it mean if the spread is temporarily shown to be 0?
In cryptocurrency/trading what does it mean if the spread is temporarily shown to be 0 (see diagram below)?
There were no bids (or asks) on the order book at that time
Market data was not available ...
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Bid ask spread and last price
Let us assume that the bid price is $10 the ask price is $20. We can only buy for $20 and only sell for $10.
Does the current price have to be in the middle? IOW, does it have to be $15? Or can it ...
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How do market makers profit from the bid-ask spread when bids are almost always lower than asks?
I am familiar with how currency exchange booths at airports make some of their money: from the bid-ask spread. For example, they will say: "you can sell us 1 USD for 1.32 CAD, and you can buy 1 USD ...
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whats the difference between spread betting and day trading in shares?
please whats the difference between spread betting and day trading in shares? i understand in the UK, spread betting is tax free while day trading in the US markets from the UK will incur tax.
For a ...
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what kind of exchange model is used in a typical large Stock Exchange?
So I have recently understood the meaning of a bid-ask spread and how market makers are involved in this process.
However if I am not one of the lucky few 'members' of for instance the Amsterdam ...
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Sell the long on a debit spread to move it closer to the short?
I’ve been thinking about opening a wide bullish debit spread on SPY with a two month time to expiry.
I’m currently looking at the March 20th calls and am thinking of selling the $425 call while ...
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Is a credit larger than the spread width bad in a credit spread?
I’ve been pondering this question since looking a put options for MCD today where I found two options for a credit spread that resulted in a credit $0.01 higher than the width of the spread.
I was ...
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Understanding the visual representation of a Calendar Spread
The following plot and its context were taken from Hull`s Options, Futures and Other Derivative Securities (2002).
I am slowly getting the basics of financial mathematics and came across this plot ...
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Clarification on definition of Negative Term Spread
I've been trying to educate myself on some financial terms and I've gotten into a point where I'm a little confused.
Reading Understanding Term Spreads or Interest Rate Spreads I guess to understand ...
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Spread betting on UK house prices
There are articles online which discuss spread betting on house prices. However I have been unable to find companies that offer spreads on any of the well known UK house price indices.
Given that ...
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Why are vertical option spreads level 3, requiring margin?
Why are vertical spreads (e.g., buying a call at one strike and selling a call at another strike, at the same expiration date) classified as "Level 3" options strategies, therefore requiring margin?
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Naked Put at Expiration
For most brokers, how naked put works at the expiration?
Buy the option at that price, if ITM.
Buy the underlying stocks if having enough cash in the account.
For 2, does it depend on if the option ...
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Spreads on taker-maker exchange
Intuitively, I feel that, for a given stock traded on 2 exchanges with different price structure (i.e., exchange A is maker-taker, exchange B is taker-maker), the spread should be wider on exchange B (...
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Forex ask vs bid spread
There's something I don't understand about the bid vs ask price spread on fx markets:
For example, assume the lowest ask price is 200, and the highest bid price is 100. So if I want to buy now I need ...
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What exactly happens during Forex transaction?
We are talking about Forex market.
I want to figure out what exactly happens when I process a transaction on this market.
Can you please correct me if I'm wrong:
Assume we are working on EURUSD pair ...
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Why doesn't the bid/ask reflect my ask price on a spread options position I am trying to get rid of?
I entered this trade in about a week ago. It's always been under the ask but the ask never reflects my ask. Why?
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How should I interpret information about bond spreads that narrowed or widened the most?
How should I interpret information about bond spreads that narrowed or widened the most? I see this information in the financial pages in the newspaper, and have some ideas about what it means, but ...
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Calculate Plus 500 Spread payment
PLEASE ANSWER IF YOU ARE USING PLUS500 as platform so that it is easier to check at platform level. Please ask for more details in case you need before downvoting
I am scratching my head around the ...
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Buy on bid sell on ask
Assuming that on some equities buy/sell price spread become more than x% in order books, which let's assume is more than exchange fees, does it make sense to to buy/sell and earn money on spread? Does ...
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How to determine if a bid-ask spread is "good" or "bad"?
Is it possible to weight the bid-ask spread? I'll explain ...
In the moment, for a share X, to trade I use the price, volume, $ volume, # trades, % chg and the bid-ask spread (BAS). To make day ...
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Negative Bid-ask spread in an OTC market
I have a question about bid-ask spread in an over-the-counter market.
I have these data:
i Spread Midpoint Imbalance Ask Bid Total Ask Total bid
7 -1.378094 -0....
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Why divide by ask rate to get the spread?
I want to know why when we calculate the spread equation, that is the difference between ask rate and bid rate divided by ask rate, why can't we divide by bid rate?
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Backtesting daytrading strategy, how to handle the spread?
I am currently developing a daytrading application which based on rules and algorithms buys or sells stocks, which right now might buy/sell a stock in the magnitude of 100 per day.
I am trying to ...
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Which spot Treasury bond is used to calculate this high-yield spread?
The link below shows the BofA Merrill Lynch US High Yield Option-Adjusted Spread. I am trying to have a better understanding of high-yield bonds before I invest in them.
https://fred.stlouisfed.org/...
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