Futures For You by Carley Garner
ARTICLE SYNOPSIS ...Futures For You by Carley Garner
SPLITTING THE BID?
Option traders often talk about "splitting the bid" or "midpoint"; what are they referring to?
All markets, whether we are talking about cars, houses, groceries, stocks, currencies, futures, or options, have two prices at any given time. There is a price at which an asset can be purchased and one at which it can be sold. In the world of trading, the difference is known as the bid/ask spread. The spread between the two prices is the compensation that the executor requires to accept the risk involved in making a market.
For instance, your ...