High Spreads and low volume - totally agree on both counts.
As to spreads, I would love to see narrow spreads (like AAPL), but it has never been true with MNTA for the 4-5 years that I have followed them and I don't expect any change. I have almost always been able to sell a little over the bid, but I usually don't care too much. Since I rarely buy back (on the normal monthly sale), I am only looking at one outrageous spread and that makes it a little easier. But the implied volatility is still so high on even the bid price, that I am willing to sell. It has worked very well for the last couple years. There were years when MNTA went down a lot, so that the plan did not help too much. And of course, DD is right - you don't participate in any dramatic upside, but there has not been any, except for a week or two this year, and then it came mostly back.
As to low volume, that directly affects the spreads. And it is a bigger problem if you are doing in-the-money options that you need to trade to close. Since I am doing slightly or not-so-slightly out-of-the-money, it is less of a problem. In my one big trade (a ratio spread in 20 and 25 March calls), I am still most of the open interest and I have closed a lot of the top end.
But each to his own. I find DD's opposition puzzling, since one can make the same argument that he does about leaving money on the table, and his argument is "potential," and the opposing argument has been "actual."
JMO.
AI
