Get Your Options Filled Quickly (Understanding Bid/Ask Spread)
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In this video we will break the the bid ask spread. What does the bid price mean and how can it help you trade options and not lose money. What is the ask price and how will it also help you trade options.
This video will answer the questions:
Why isn't my option being fulfilled?
How can I get my option fulfilled quickly?
What is the Bid/Ask Spread?
Why can I only trade options in 5 cent increments?
Why did robinhood say that I can only trade in 5 cent increments because the value of the option was under $3?
Who sets the bid ask price?
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DISCLAIMER: The content discussed in these videos are solely my opinion and should never be used as financial advice. This channel is for entertainment purposes only. Make sure to consult with a professional before making money decisions. This video and description contain affiliate links, which means that if you click on one of the product links, I’ll receive a small commission; all of which helps grow the channel! Thank you for your support!
@RebeccaKarner 3 жыл бұрын
Easily one of the best explanations of bid/ask spread ever. Thank you!
@BradFinn 3 жыл бұрын
Wow, thanks!
@RebeccaKarner 3 жыл бұрын
@@BradFinn just picked up the course too. You're good peeps. Thank you for making this knowledge accessible to everyone 😊
@risingsun2677 4 ай бұрын
This was beautiful. Loved the simple, yet intelligent explanation along with your graphics. Thank you from a confused and frustrated options trader suffering from delayed or unfilled closing orders on TOS. Might be switching to TT. Cheers. 🙏
@BradFinn 4 ай бұрын
Thank you for the kind words
@brianciofani4698 2 жыл бұрын
There are a lot of people who are students of a subject but can't teach it. You sir are an awesome teacher. I think I could even learn physics or trig with a teacher like you!! Feel better Brad!!
@SkyJunkie1000 3 жыл бұрын
Your videoa are on point. Super educational and the way you exain it makes it so easy to understand I might just slide into your discord!
@BradFinn 3 жыл бұрын
See you in there.
@jakewhite6518 2 жыл бұрын
Timeless knowledge, even a year later, thanks Brad, I learn something everytime
@BradFinn 2 жыл бұрын
Cheers Jake
@robinruane6255 3 жыл бұрын
Nice! I've never really understood how low volume was affecting my ability to complete my orders but it makes sense now!
@BradFinn 3 жыл бұрын
Glad I could help!
@jayfitt6374 Ай бұрын
I've been searching for weeks to get a clear demonstration on this subject....And I wasted many hours going through videos with little or no eplanation. Thank you for answering the question and explaining this so clearly!
@BradFinn Ай бұрын
Right on. Glad to help
@TheAplauron 2 жыл бұрын
Wow, great explanations. Thank you very much and more power!!
@BradFinn 2 жыл бұрын
Cheers
@ericanderson8330 3 жыл бұрын
Always helpful! If anyone reading this and is considering to join the Discord; totally worth it, great community, learning a lot!
@BradFinn 3 жыл бұрын
You're the best!
@lj4001 2 жыл бұрын
Does the discord provide option play alerts? I just want to know when to get into a good play n not waste time figuring it out on my own. I miss so many plays bc of time consumption on research!
@todossantos2173 3 жыл бұрын
great video Brad....loved the explanation and the examples
@BradFinn 3 жыл бұрын
Cheers
@maryallisonmusic615 Жыл бұрын
You are fantastic at explaining/teaching this. Thank you so much!
@BradFinn Жыл бұрын
You're very welcome!
@nfavor 3 жыл бұрын
Love the channel. Thanks for another great video Brad!
@BradFinn 3 жыл бұрын
Thanks for watching!
@justindecrosta6469 3 жыл бұрын
This helped tremendously. Thank you
@BradFinn 3 жыл бұрын
Cheers
@BradFinn 3 жыл бұрын
*Learn Options Playlist* kzfaq.info/sun/PLKkDvxOyGhXNQScWSs94PZEHpTPx93M7F *Learn The Wheel Playlist* kzfaq.info/sun/PLKkDvxOyGhXM3KBHOttbobZqzP-uN1-Dw Please Give A Thumbs Up If This Video Taught You Something So KZfaq Knows To Share!
@marygreen4302 3 жыл бұрын
Thank you. I really needed this education. ☺️
@BradFinn 3 жыл бұрын
Cheers. Thanks for watching Mary!
@marygreen4302 3 жыл бұрын
I’m going to go back and watch ALL of your videos now. I’ll make sure to recommend you to my trader group at the hospital I work at.
@MsFlipper97 3 жыл бұрын
Great explanation..I wondered how this was determined.
@BradFinn 3 жыл бұрын
Thank you for watching
@zebco3330 3 жыл бұрын
You sure can teach. Thanks and good call on the Vuzi csp i made the exact trade!
@BradFinn 3 жыл бұрын
Good stuff!
@bmorris6156 3 жыл бұрын
Great job and research as always. Many thanks
@BradFinn 3 жыл бұрын
Cheers
@nayr661 3 жыл бұрын
Great information! I didn't know a lot of this!
@BradFinn 3 жыл бұрын
Glad it was helpful!
@mikecook7683 3 жыл бұрын
Thanks brad, your a great teacher.
@BradFinn 3 жыл бұрын
I appreciate that!
@djbyrdbeatz 3 жыл бұрын
Great info as always. Keep killin it! 💪
@BradFinn 3 жыл бұрын
Appreciate it!
@Thetatraderz 3 жыл бұрын
With schwab street smart edge you can use walk limit order. Start at the ask price and it will slowly go down towards the bid (or even midpoint if you want) when trying to fill. It has gotten me better fills than any brokerage, even confirmed when my friend tried the exact same trade.
@BradFinn 3 жыл бұрын
Awesome tip. I will check it out!
@Thetatraderz 3 жыл бұрын
@Brad Finn No its not!
@LuellasLullabies 3 жыл бұрын
Literally needed this video this morning
@BradFinn 3 жыл бұрын
Yikes.. hope it still will help in the future
@LuellasLullabies 3 жыл бұрын
@@BradFinn 👍 today was my first put and it wasn’t getting executed and didn’t understand why , thanks for the help!
@modermike04 2 жыл бұрын
Awesome video, much appreciated for the info.
@BradFinn 2 жыл бұрын
You bet!
@jamesroberts5450 7 ай бұрын
great stuff bro. Thank you.
@BradFinn 7 ай бұрын
My pleasure!
@vickysdancefitness8413 2 жыл бұрын
I liked every option videos you made I watched, thank you for making them! A quick question since you talked about volumes. What does the “Volume”and “Open Interest” here mean too? And why the # under the “Volume” isn’t equal to Ask qty or the Bid qty, and why the “Interest” isn’t equal to Ask qty and Bid qty combined? Can you make an updated video about these 2 topics? Or if you already did, please let me know which one you mentioned, I will go watch it.
@cashjackson493 Жыл бұрын
Thank you for the explanation
@BradFinn Жыл бұрын
You’re welcome
@kevinl3259 3 жыл бұрын
You're the man Brad!
@BradFinn 3 жыл бұрын
Thank you so much
@charlesamberwilliams1257 3 жыл бұрын
My gosh that was an excellent explanation!
@BradFinn 3 жыл бұрын
Glad it was helpful!
@jeralynrose2917 3 жыл бұрын
This helps so much. Thank you?
@BradFinn 3 жыл бұрын
You're welcome?
@bandsquad2723 2 жыл бұрын
Very helpful video, thank you very much.....
@BradFinn 2 жыл бұрын
You’re very welcome.
@SalC324 3 жыл бұрын
Thank you 🙏 very very helpful!!
@BradFinn 3 жыл бұрын
You're very welcome!
@SilverF0XX 3 жыл бұрын
Solid stuff sir, see you next week
@BradFinn 3 жыл бұрын
Sounds good!
@johnhenninger9920 3 жыл бұрын
Great info!
@BradFinn 3 жыл бұрын
Thanks for watching!
@letmeseeit66 2 жыл бұрын
Excellent explanation.
@BradFinn 2 жыл бұрын
Thank you
@andersontpl 3 жыл бұрын
Great explanation
@Jake51500 3 ай бұрын
Great video Brad!! Maybe it's just me but I keep hearing BIG ASS bid & BIG ASS spread 😂
@BradFinn 3 ай бұрын
👊🏻
@huhTyree Жыл бұрын
Great video !
@BradFinn Жыл бұрын
Thanks!
@ronholt2242 3 жыл бұрын
Great video sir.
@BradFinn 3 жыл бұрын
Thank you kindly
@brendonthomas2555 2 жыл бұрын
Very informative tutorial
@BradFinn 2 жыл бұрын
Thank you
@JaiC81 Жыл бұрын
G'Morning - thanks for posting this - had a quick question, Option bought on Mid (not ask or bid) - how does one interpret that? From the video it could be a buyer or a seller, right? just confirming my understanding! Thanks again...keep up the good work!
@BradFinn Жыл бұрын
Mid is just the price in the middle of the bid and ask. Depending on the spread, this will be close to the market price.
@JaiC81 Жыл бұрын
@@BradFinn can one infer BTO or STO? My gut say we can’t know.
@samh5131 3 жыл бұрын
Good info
@BradFinn 3 жыл бұрын
Thanks
@markkennedy1743 3 ай бұрын
@Brad Finn Awesome vid! Would you say it's better as an options trader to trade in markets with smaller bid ask spread and higher volumes so your orders get filled more often? Or does it completely depend? Thanks!
@BradFinn 3 ай бұрын
Definitely. Huge fan of high liquidity.
@yichengliu 3 жыл бұрын
Great stuff
@BradFinn 3 жыл бұрын
Thanks
@spyrebel7612 3 жыл бұрын
It's not $10, it's $5. You are paying up or selling down from the Mark or average. So its 3.975 (3.98) to 4.00 and then 3.975 (3.98) to 3.95.
@BradFinn 3 жыл бұрын
Incorrect. But do you bud.
@spyrebel7612 3 жыл бұрын
@@BradFinn how is that incorrect? If you see the mark as 3.98 and you market buy you pay 4.00. Price doesn’t change and you sell. You get 3.95, not the 3.98. So you don’t see the mark change (3.98) and you lost $5. You paid 4 and got 3.95 back. That’s $5. Also, “you do you bud?” Really?
@ceptember. 2 жыл бұрын
@@spyrebel7612 oof, he couldn't have been bothered to say what is accurate and gives a dismissive response. obvi he can't respond to criticism and just replies to those who jerk him
@hanhan2360 3 жыл бұрын
Could you please make a video on how options expiration day impact the price on stock prices. Thanks! I dont know how this works out
@BradFinn 3 жыл бұрын
Look at the "learning options" playlist in the comments.. its all there
@mitchelllang4396 3 жыл бұрын
so if you buy an option at the ask price and it comes in the money it really just lowers profit and has little affect?
@chengu832 3 жыл бұрын
Wish i watched this amazing video before i bought TD calls... :((
@BradFinn 3 жыл бұрын
next one will be better!
@erkstruwe6169 3 жыл бұрын
Why would getting in and out of AAPL cost me 10$? I'd buy @ 4.00$ and could immediately sell @ 3.95$. That's a 5$ difference, isn't it?
@BradFinn 3 жыл бұрын
If you are a buyer at $3.95 and come up to $4.00 to have it filled to the the seller, you just gave up $5 to have the fulfilled by the seller. Now you are the seller at $4.00 and need to sell it back to a buyer at $3.95. You just gave up another $5. 5+5=10
@erkstruwe6169 3 жыл бұрын
@@BradFinn Well, that's kind of a weird way to calculate. When you look at your account balance before and after both transactions, the difference is 400$ - 395$ = 5$.
@spyrebel7612 3 жыл бұрын
@@erkstruwe6169 my exact comment. You aren’t moving up to 4. You’re simply a buyer at 4 and a seller at 3.95. You always only lose the spread, not double the spread. Pretty disappointed in the reply comment I got back.
@joewarrick6043 Жыл бұрын
Great video! But I should have watched before I lost so much$ lol
@BradFinn Жыл бұрын
Happens to the best of us
@SnehasishGhoshSg 2 жыл бұрын
Iron Condor is not getting filled. Can you make a video on that?. This has been a great informative video. Thank you
@BradFinn 2 жыл бұрын
kzfaq.info/get/bejne/q6x4m9J0vMC2nqs.html
@Brooke-jd3if 3 жыл бұрын
Great info! Can you do a video on how to minimize the premium for a covered call that is going to expire worthless? Basically I want to buy to close and then open a new call closer to the money, but because of the 5 cent premium I “lose” $5 if I don’t let the call expire worthless. Not sure if there is a way around this.
@seymoresmithh8908 3 жыл бұрын
There’s no magic way of closing a trade at a lower cost for small cap stocks. As Brad mentioned, the market maker needs that $5 fee (from the bid ask spread) for incentive to make the transaction. This is true for small cap stocks. If you are a few days out from expiration then go ahead and buy to close for $5 (if that’s the going price) and then open your new position. It’s not worth it to wait a few days to “make” an extra $5. You never know some crazy s**t might happen and cause the price to shoot up all of a sudden. Crazy stuff can still happen after hours even on day of expiration. You can’t trade options after hours but price can still move and if it moves in the money after hours then the option buyer can still exercise the option (buyer gets 1.5 hours after market close to exercise). Even on the day of expiration and you are close to in the money then you should consider closing for $5 especially if you sold it for $100 to begin with. Just not worth holding a contract to expiration if you are at risk for your option being exercised and you don’t want it to be exercised.
@lj4001 2 жыл бұрын
Caution if you do this manually, you will get a “Washed” Mark for entering the same play, only if you “Roll” to a later date or if you are a Day-Trader is it exempt.
@dbtrek439 3 жыл бұрын
Word.
@ammartm1 3 жыл бұрын
whats better buy bid or buy ask thanks.
@BradFinn 3 жыл бұрын
it depends on what you are doing
@ChristianCampos24 10 ай бұрын
If I buy a put and I’m in the money and want to sell. Should I go towards the ASK price and ask for the most. Or should I go the the bid price and sell for less ? For profit ? Would mean a lot if you answered. Thanks.
@BradFinn 10 ай бұрын
As a selling the lower the limit price the more likely it will be filled. This is the bid side
@Bullishbeto 10 ай бұрын
Does bid ask and last really need to be focused on with just trading the market (not options)?
@BradFinn 10 ай бұрын
depends on the security and it’s volume
@aazevedo225 3 жыл бұрын
Great video!! Troll voice strikes again! 🤣
@BradFinn 3 жыл бұрын
Always!
@Mr.Matt.Hutchinson 2 жыл бұрын
Wait, did you show how to adjust the bid / ask price using Robinhood? You certainly talked about it, but where did you adjust it?
@BradFinn 2 жыл бұрын
You don’t adjust the bid ask. You adjust your limit price
@Mr.Matt.Hutchinson 2 жыл бұрын
@@BradFinn thank you!!
@knm185 Жыл бұрын
If you are selling a covered call, is there concern about the Bid / Ask spread?
@BradFinn Жыл бұрын
It depends on the asset and what the spread is. Generally the stocks I chose have pretty high liquidity and therefore a tight spread
@infact5667 3 жыл бұрын
If you become a member of your Patreon channel, are the videos the same ones that are on KZfaq?
@BradFinn 3 жыл бұрын
Discord is a chat room with 500 people in it. Not videos
@marcusangeles2304 3 ай бұрын
Is it possible for your order to be filled less then what the ask price is if u set put a limit order to the ask price. Using ur Apple example. If u were a buyer and u wanted the order to be filled rt away and came up to the ask price and put a limit order for 4.00. Is it possible for it to be filled less than 4.00 or it will only be filled at 4.00?
@flextoronto814 3 жыл бұрын
Dope
@BradFinn 3 жыл бұрын
🚀
@dustinmeyers1460 3 жыл бұрын
Getting a fill on Robinhood is not the greatest buttttt options are commission free. Great video people need to know this!
@BradFinn 3 жыл бұрын
Thank you
@artur474 Жыл бұрын
Great video! When buying options contracts on webull it forces me to have spread in $.05 increments on of the stocks. However, the bid and ask is in the $.01 increments. It always goes up in down within a penny. How other traders able to have spread only within pennies? How i can place bid in one penny increments on options??
@BradFinn Жыл бұрын
That’s not webull that’s all brokerages. Here’s a video on spreads kzfaq.info/get/bejne/i8ucYKl-xtq5nYk.html
@roman_fla 3 жыл бұрын
How is it that you spend 400 then instantly sell for 395 and you lose $10??? 400-395=5
@BradFinn 3 жыл бұрын
No idea where you got 400 from.. but as far as when I said you lose $10.... There are two transactions. An open and and close. If you are the buyer and go up $5 to the seller you give up $5 and then if you go back down $5 to the buyer then you give up $5 more. 5+5=10
@Luhbeet 3 жыл бұрын
becuase you technically lose another 5 by coming up from 395 to 400 initially becuase you could buy it for 395. you pay more and sell for less, $5 each time
@roman_fla 3 жыл бұрын
@@BradFinn 400 is from your video. The ask side. You’re literally saying at 6:35 that if you come up to $400 and get filled at $400 then immediately sell at $395, you lose $10. Edit. By the same logic, if you stay at $395, and fill at $395, then immediately sell for $395 you made $5.
@roman_fla 3 жыл бұрын
@@Luhbeet you go to a store, you spend $400, then you come back a minute later for a refund and receive $395. We’re you $5 or $10 short of your original purchase?
@spyrebel7612 3 жыл бұрын
@@Luhbeet it’s $5. You buy and sell immediately. Do you lose $10? No. You lose $5. You lose the spread, not 2x the spread.
@raztube90 3 жыл бұрын
If my bid price is 0 am I screwed ? My options closes in few days. I am So worried now.
@tracyfasthorse3992 2 жыл бұрын
See you at 100K!
@BradFinn 2 жыл бұрын
Yes you will. Thanks Tracy!
@just.bob.j Жыл бұрын
Or you can say: you are buying at the higher price (ask) and selling at the lower price (bid).
@BradFinn Жыл бұрын
Cool
@fatmirsejdini5992 3 жыл бұрын
I bought my first call this morning with Robin hood. 4/16 sundial stock 10 contracts 1$ call .25 limit, Cost me 200$ and its showing in my acct a green 280$, is my profit 80$ or 280$, break even is 1.20$ and its market value of 280$ and 80$ in the money?
@BradFinn 3 жыл бұрын
The value of the option with change through its life span. The only value that matters is when you close the option or it expires.
@cmfanz 3 жыл бұрын
Brad Finn, why do we not have a trailing stop with a % in any of the brokerages for option contracts? I have tried a dozen of them and I don't see this on any one of them. This is a very common technique in common shares for capturing maximum profit in the uptrend before the stock reverses. Most brokerages seem to have the $ trailing stop but not the %. That is quite frustrating. I am not sure if you have seen this before or have a solution for it. Just wanted to know!
@TheFunnyBone5 3 жыл бұрын
I’ve been selling aggressive puts that have been hitting below the strike price but the buyer is not exercising, does anyone know why this is? It seems strange to me they wouldn’t exercise if they were making profit
@laurendao6476 3 жыл бұрын
I trade on webull n I didn’t even realize that people can change the bid n ask price. I just buy an option that is available n always get filled within seconds.
@seymoresmithh8908 3 жыл бұрын
It gets filled within seconds because it’s likely not the best price you can get. You can always change the bid (if buyer) or ask (if seller) by setting the price you like using a limit order. And frankly, you should make it a habit to always use limit orders even if you are willing to pay/sell at current market value. If a stock price is volatile, the price you thought you were getting may not be the price you end up getting by the time you hit submit/execute and order executed. And if you are trading on free trading platforms like Robinhood or Webull, then you may not get your order executed as quickly as some other platforms so there’s even more lag by the time your order executes. With other major brokers going to free trades, this is less of an issue but the clients major brokers still get better executions.
@laurendao6476 3 жыл бұрын
@@seymoresmithh8908 I knew u can do that with buying shares but didn’t realize I can go that with options too. Thanks!
@erkstruwe6169 3 жыл бұрын
Also, how could the exchange get the spread? When the buyer sets their limit at ask price, they pay the ask price. At the same time, the seller gets the ask price. There's nothing left for anyone else. Of course, both parties may be charged fees by their brokers, but they are paid in addition to the actual stock price, aren't they?
@BradFinn 3 жыл бұрын
you lost me a little at on this one. The exchange holds all the contracts at the bid and the ask. They are on both sides of the trade. When you buy or sell an option, they have already bought or sold that contract at a specific price.. the bid or the ask. Then they wait around (at the market) waiting for someone to come around and buy or sell the contracts they are holding. The buyer can only set a limit price because the market makers (exchange) allowed It to happen. They allow a contract to be written at a particular bid or ask price. We, the retail investors, dont get to just choose what options we want. Thats why we have an options chains. Without the exchange there would be no option to write or buy. Thats called low liquidity. All bid ask prices are created by the exchange. They bring buyers and sellers together. Not the broker. and they are compensated for that. they are who you are buying from or selling to. If you need more understanding on this look up "market makers".
@erkstruwe6169 3 жыл бұрын
@@BradFinn Yes, I understand what a market maker does and that they set the market-maker spread. However, the exchange and the market maker are two different entities, aren't they? Also, when (even a retail investor) sets e. g. a limit buy order inside the market-maker spread, the actual bid-ask spread effectively shrinks. If, in this case another retail investor meets that new bid price with a market order or a matching or overlapping limit sell order, the trade is made between the two, without the market maker being involved, right? Basically, anyone who has the guts to do so, can act as a market maker (by setting narrower bid-ask spreads than anyone else), or am I mistaken?
@spyrebel7612 3 жыл бұрын
@@erkstruwe6169 you are accurate. The market sets the spread, not the exchange.
@benjaminrickards919 3 жыл бұрын
Thanks Brad for SSOK Sunstock Inc. up 22% on it already. 10x potential. Ur the BEST!!!!
@erdemo6776 2 жыл бұрын
why you mind 5 cents this much? in our local market (premature in options) its min min % 10. just go ahead :)
@BradFinn 2 жыл бұрын
Who said I minded anything?
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