Starting the New Year
COF Update
The morning of the Boxing Day (the day after Christmas) I saw the widest spreads in COF that I’ve even seen: 10 cents or maybe even 15 cents bid-ask spreads in the first 15 minutes following NYSE open. Curiously, the option prices haven’t widened proportionally. I normally expect to see usually 5 cent and sometimes 10 cent spreads for options priced around a dollar. Today’s morning they were wider, but not by as much: I saw spreads of 10 cents and occasionally 15 cents.
Clearly, trading at such wide spreads does not make sense. While somewhat tighter spreads were seen during the trading days of the rest of the week, little trading was done indeed and the stock remained range bound.
January 3 was the first trading day of the New Year. Wide spreads of about 5 cents were seen in the morning for quite a while after the open, but the spread tightened later on.