[perl4ever]

My impression is that most options are very illiquid, and I've gotten discouraged by the huge spreads. A few things have liquid options, but not interesting stuff. Just trying to buy and sell at the best available price seems very difficult when I see for example a bid/ask of $0/$5.

[beezle]

Couple things - most options trade a spread of 1-3% depending on how far from the money they are and how near expiration. Option interest also follows interest in the underlying.

In a less traded issue - I guaranty the real price is not $0/$5, it is just nobody has bothered to show interest yet (and sometimes brokers do not provide the true market). Assuming you have a reasonable idea of where the bid should be, low ball it a little and put an order in. Like magic, you'll be joined by a few hundred contracts and in fact, probably out bid. An offer may also appear too.

[zeptonix]

What are you trying to trade that has a bid of (near) $0 and ask of $5? Most stocks are generally way more liquid. Also you'll find you can get hit at/near the midpoint even when the bid/ask spread is large. (Which makes sense ... as long as you offer a price slightly worse than what the theoretical pricing model dictates ... why wouldn't the market makers want to trade against you?)

[benmanns]

OTM, non penny program symbols is my guess.

[benmanns]

Get closer to in the money. Also look up the penny program symbols. SPY is frequently a penny wide spread ($1 per contract).