Should I care how wide Bid/Ask Spread is???

[billy59]

Hi All,

I’m presently trading options on a simulator. I have the following query which is best explained in an example.

Image two call options for two different stocks with different bid and ask spreads but all other factors being equal.

Stock A Bid 0.89 Ask 0.91 Mark 0.90
Stock B Bid 0.70 Ask 1.10 Mark 0.90

Using a simulator, I can simply buy either call option at it’s Mark value of 0.90. I have always been thought that narrow Bid/Ask spreads are good and wide Bid/Ask spreads are bad. If I can buy the call option for 0.90 in both cases, why should I care how wide the Bid/Ask spread is? (does the difference become apparent if I switch from using a simulator to using real money?)

Any with this will be greatly appreciated. Thanks In Advance for all responses.

[blueboy388]

If you buy a contract @.90 and the bid is .70 you are -.20 if you sell the contract at market value. You can and should use limit orders but you may not fill @ .90. I have had "mid"range limit orders sit for days before they were filled.

[Hzaras]

To get real money back you have to pay .20 extra to the simulator.