Hi Reid,
<< Can you place an option limit order BETWEEN the bid/ask and expect your order to execute? >>
No.
Sometimes you will get a fill immediately, most times you will not.
Typically it will go something like this. A call option contract is offered at 2, bid at 1.75. You enter a limit sell order at 1.90. Nothing happens. The spread moves as the contract moves, so let's say eventually the contract is offered at 2.20, bid at 1.90. Your limit executes.
Again, this depends on not just the open interest, but the current trading interest, and the size of the spread, the size of the bid and ask, and how fast and with what volatility the underlying is moving. Probably it also depends on the lineup just off the inside bid/ask, but I have no access to this data. If things are lined up, then you can get an immediate fill. But if not, then you won't.
This can and does happen even with issues that have a lot of open interest and are fairly liquid. That has been my experience.
T |
