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Strategies & Market Trends : Tech Stock Options
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To: sammy™ -_- who wrote (58688)4/15/2006 5:11:27 PM
From: James Berg   of 58727
 
>How does a very low number of contracts affect the option?

Usually the spread (the difference between the bid and ask price) will be larger if there is a low number for the open interest.

Also, you tend to have to buy at the ask and sell at the bid as the market is less competitive due to fewer people interested in buying or selling the contracts. The greater the open interest, the greater the chances of a more favorable transaction on either the buy or sell side.
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