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Could you explain this a little better? I'm sure you're not contradicting yourself, but that's how I'm understanding it.

What risk is there of not finding the other side when you are playing the options game? In your first post you seem to imply that this isn't really a risk.



Ah, I see what you mean. Yes in this case I'm contradicting my self a bit.

The thing about options, as compared to stocks, is that they can be literally worthless. A stock that is bankrupt can still have a buy side bid of a few pennies as the buyer can hope for some cash from the bankruptcy proceedings.

Consider a Call option on facebook for Nov 16th with a strike to buy at $40.

This means you can buy facebook for $40 up until Nov 16th. Currently FB US Equity is trading at $19.50, so with 2 days left and it's historic volatility there is almost no way it's going to get to $40 and make your option worth anything.

In this case the Sell side of the book would have many offers as everyone would love to sell this call for any amount of money as it's worthless.

On the buy side you'd expect no bids as there is almost no way this could make you money.

Now when I mentioned market makers I was referring to trading options that still have some value. I assumed that the OP was talking about not being able to sell options when they had some value, in this case there is always someone willing to act as a market maker in this case.


Thanks, that makes a lot of sense.

I thought there was the implication that somehow you might not be able to exercise your option due to lack of market maker.




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