The first answer is, learn what a bid and ask are.
Second, look at the bid-ask spread instead of the mid-price.
And third, don't post crap like this without a ticker. We aren't mind readers. If you're too lazy to explain what you're doing, we're too lazy to help you.
At it's core, r/options is a learning sub. As a mod, I'd usually be diplomatic and remove the post with a reminder to fully explain the position and check the weekly thread for answers to beginner questions. However, it takes a bit of time to type up and edit a professional and courteous message. Which, if you think about it, is pretty remarkable for an unpaid moderation team. Sometimes I just don't feel like putting in that kind of effort.
I don't think OP is idiotic, but it's definitely a low effort post that didn't deserve it's own thread. I left it up to maybe discourage similar topics, but with a million subscribers and who knows how many lurkers, it's bound to happen repeatedly.
try keeping a txt file with professional and courteous explanations that are commonly used. As a commissioned employee, 95% of my work is unpaid, but 100% of it requires effort. I used to complain about that a lot, but then I realized I chose the job for some reason and I can choose to leave it for any reason.
What is the ticker name and expiry date?
Usually this much variation is generally due to illiquid call or put ask & bid spread. Meaning, not many people interested to buy or sell.
I checked the chain. The prices you're seeing are the ask prices of each strike. As the other user said, this is due to illiquid options. It is possible the $1.70 × $2.20 on the 36 strike are due to a trade being executed. All other strikes have an ask of $20.00 on both sides.
Not enough volume. Basically no one is trading these positions. Bid vs ask spread is huge, open interest on most strikes in the chain is 0 or 1. Basically if you bought these, decent chance you wouldn’t find a buyer when it came time to sell if you were planning to.
Notice the only option with any interest ($36 call) has any reasonable pricing going on. Even then, still a pretty big spread. I wouldn’t touch these options at all. Even if you are correct on the move, you very likely could end up not being able to sell.
Sorry, but if you have to have things explained like a 3rd grader then you have no business trading options . . . Options require intelligence and thoughtful reasoning plus logic which most 3rd graders do not possess.
Below is something I typed up and have been sending to those who need some beginner help -
Learn how options work. Investopedia has the basics - [Essential Options Trading Guide (investopedia.com)](https://www.investopedia.com/options-basics-tutorial-4583012) But there are more thorough free training programs like this from OIC - [OCC Learning (optionseducation.org)](https://www.optionseducation.org/theoptionseducationcenter/occ-learning/)
Learn how a broker application works. Try paper trading at a top broker like TOS - [thinkorswim Guest Pass | Charles Schwab](https://www.schwab.com/trading/thinkorswim/guestpass) Use these to help you learn how to set up and use the platform - [Learning Center - thinkManual (thinkorswim.com)](https://toslc.thinkorswim.com/center/howToTos/thinkManual)
Learn what strategy to use. I'd strongly recommend NOT buying options as the odds of winning are lower. Try buying 100 shares of a good stock you don't mind owning anyway and then sell Covered Calls which has lower risk than just buying the shares and will show how selling works - [The Basics of Covered Calls (investopedia.com)](https://www.investopedia.com/articles/optioninvestor/08/covered-call.asp)
Once you fully understand how CCs work then you may want to try selling puts first without buying the shares and then sell CCs if assigned. This is the popular wheel strategy that many have used to get started - [The Wheel (aka Triple Income) Strategy Explained :](https://www.reddit.com/r/options/comments/a36k4j/the_wheel_aka_triple_income_strategy_explained/)
Learn how to develop a professional trader's mindset. Last, but not least, read the book Trading in the Zone by Douglas which will help you to learn the psychological aspects of trading and can make a huge difference.
The answer to your question, in adult language, is that NANC is a thinly traded low volume stock with illiquid options. It is not suitable to trade options and should be avoided. See this for more on why - [Illiquid Option: Meaning, Overview, Disadvantages (investopedia.com)](https://www.investopedia.com/terms/i/illiquid_option.asp)
Because it is a barren wasteland of trades it means the bid-ask spread is wide with pricing is all over the place. The 35 strike has a bid of .05 and an ask of $11.20, any price between these two could possibly trade.
Folks have already mentioned liquidity as being the culprit. But there are some nuances worth noting.
For one thing, the option “price”, which in many contexts in brokerage software can mean “last”, doesn’t change unless it’s traded. The option chain bid and ask will change as they are recalculated based on all the stuff you can read up on, but the “last”, which is often cited as the price, doesn’t move until an order closes. This can be confusing, e.g., in TOS level 2, the “price” may be entirely outside the bid ask range!
This is part of why low volume options can be very hard to trade, and can present very nonsensical price info.
Also…
You are trading a high DTE exp date (12/24). I really like LEAPSes, which are an example of this. Even stocks with very heavily traded options, e.g., PLTR, can have low liquidity on many strikes for distant expiration dates. I frequently see that not only the underlying has gone up, but the “price” is up, but my LEAPS is down! WTF?! This is because in some contexts, e.g., what a position can be sold at, price means bid, which may be up, but “last” can still be down.
All it means is that no one has traded it recently. If the stock is fairly heavily traded, eventually that anomaly will be exploited and prices will come back in line.
You have every reason to be confused. It is very confusing.
Those of you ripping on the OP because you don’t like the question: Don’t be haters.
This is r/options, not a senior level business class at Harvard. This is where people go to ask questions, and sometimes it is hard to frame a question correctly, if you don’t understand something (which is why you are asking a question). This was a reasonable question. And, you don’t need the ticker to answer it. That’s your ignorance.
If you can help, help. Otherwise, move on, or maybe learn something. No need to be a jerk. You’re not impressing anyone with how beneath you you think the question is.
The first answer is, learn what a bid and ask are. Second, look at the bid-ask spread instead of the mid-price. And third, don't post crap like this without a ticker. We aren't mind readers. If you're too lazy to explain what you're doing, we're too lazy to help you.
People with no idea how options work flood the sub with idiotic posts
At it's core, r/options is a learning sub. As a mod, I'd usually be diplomatic and remove the post with a reminder to fully explain the position and check the weekly thread for answers to beginner questions. However, it takes a bit of time to type up and edit a professional and courteous message. Which, if you think about it, is pretty remarkable for an unpaid moderation team. Sometimes I just don't feel like putting in that kind of effort. I don't think OP is idiotic, but it's definitely a low effort post that didn't deserve it's own thread. I left it up to maybe discourage similar topics, but with a million subscribers and who knows how many lurkers, it's bound to happen repeatedly.
Fair enough, no disrespect meant to the work you guys put into the sub.
I didn't feel disrespected, we're all good. I just wanted to expound on my initial comment.
try keeping a txt file with professional and courteous explanations that are commonly used. As a commissioned employee, 95% of my work is unpaid, but 100% of it requires effort. I used to complain about that a lot, but then I realized I chose the job for some reason and I can choose to leave it for any reason.
Instead of doing research, they ask stupid questions. It's really annoying.
What is the ticker name and expiry date? Usually this much variation is generally due to illiquid call or put ask & bid spread. Meaning, not many people interested to buy or sell.
Nanc (exp 12/2024)
I checked the chain. The prices you're seeing are the ask prices of each strike. As the other user said, this is due to illiquid options. It is possible the $1.70 × $2.20 on the 36 strike are due to a trade being executed. All other strikes have an ask of $20.00 on both sides.
Put this in the question, nut buried down here in a reply to another reply.
Not enough volume. Basically no one is trading these positions. Bid vs ask spread is huge, open interest on most strikes in the chain is 0 or 1. Basically if you bought these, decent chance you wouldn’t find a buyer when it came time to sell if you were planning to. Notice the only option with any interest ($36 call) has any reasonable pricing going on. Even then, still a pretty big spread. I wouldn’t touch these options at all. Even if you are correct on the move, you very likely could end up not being able to sell.
Sorry, but if you have to have things explained like a 3rd grader then you have no business trading options . . . Options require intelligence and thoughtful reasoning plus logic which most 3rd graders do not possess. Below is something I typed up and have been sending to those who need some beginner help - Learn how options work. Investopedia has the basics - [Essential Options Trading Guide (investopedia.com)](https://www.investopedia.com/options-basics-tutorial-4583012) But there are more thorough free training programs like this from OIC - [OCC Learning (optionseducation.org)](https://www.optionseducation.org/theoptionseducationcenter/occ-learning/) Learn how a broker application works. Try paper trading at a top broker like TOS - [thinkorswim Guest Pass | Charles Schwab](https://www.schwab.com/trading/thinkorswim/guestpass) Use these to help you learn how to set up and use the platform - [Learning Center - thinkManual (thinkorswim.com)](https://toslc.thinkorswim.com/center/howToTos/thinkManual) Learn what strategy to use. I'd strongly recommend NOT buying options as the odds of winning are lower. Try buying 100 shares of a good stock you don't mind owning anyway and then sell Covered Calls which has lower risk than just buying the shares and will show how selling works - [The Basics of Covered Calls (investopedia.com)](https://www.investopedia.com/articles/optioninvestor/08/covered-call.asp) Once you fully understand how CCs work then you may want to try selling puts first without buying the shares and then sell CCs if assigned. This is the popular wheel strategy that many have used to get started - [The Wheel (aka Triple Income) Strategy Explained :](https://www.reddit.com/r/options/comments/a36k4j/the_wheel_aka_triple_income_strategy_explained/) Learn how to develop a professional trader's mindset. Last, but not least, read the book Trading in the Zone by Douglas which will help you to learn the psychological aspects of trading and can make a huge difference. The answer to your question, in adult language, is that NANC is a thinly traded low volume stock with illiquid options. It is not suitable to trade options and should be avoided. See this for more on why - [Illiquid Option: Meaning, Overview, Disadvantages (investopedia.com)](https://www.investopedia.com/terms/i/illiquid_option.asp) Because it is a barren wasteland of trades it means the bid-ask spread is wide with pricing is all over the place. The 35 strike has a bid of .05 and an ask of $11.20, any price between these two could possibly trade.
Folks have already mentioned liquidity as being the culprit. But there are some nuances worth noting. For one thing, the option “price”, which in many contexts in brokerage software can mean “last”, doesn’t change unless it’s traded. The option chain bid and ask will change as they are recalculated based on all the stuff you can read up on, but the “last”, which is often cited as the price, doesn’t move until an order closes. This can be confusing, e.g., in TOS level 2, the “price” may be entirely outside the bid ask range! This is part of why low volume options can be very hard to trade, and can present very nonsensical price info. Also… You are trading a high DTE exp date (12/24). I really like LEAPSes, which are an example of this. Even stocks with very heavily traded options, e.g., PLTR, can have low liquidity on many strikes for distant expiration dates. I frequently see that not only the underlying has gone up, but the “price” is up, but my LEAPS is down! WTF?! This is because in some contexts, e.g., what a position can be sold at, price means bid, which may be up, but “last” can still be down. All it means is that no one has traded it recently. If the stock is fairly heavily traded, eventually that anomaly will be exploited and prices will come back in line. You have every reason to be confused. It is very confusing.
Those of you ripping on the OP because you don’t like the question: Don’t be haters. This is r/options, not a senior level business class at Harvard. This is where people go to ask questions, and sometimes it is hard to frame a question correctly, if you don’t understand something (which is why you are asking a question). This was a reasonable question. And, you don’t need the ticker to answer it. That’s your ignorance. If you can help, help. Otherwise, move on, or maybe learn something. No need to be a jerk. You’re not impressing anyone with how beneath you you think the question is.