Replies to post #473691 on Anavex Life Sciences Corp (AVXL)

[B60611]

In reality, with a little work they’re not that illiquid, since regardless of how wide the listed spreads are, MM computers are programmed to fill wherever the market is, and they’re generally willing to buy for a couple cents less than they’re willing to sell. Knowing this, make an educated guess (based on recent sales of that contract or infer from ones nearby in price) and then just move up and down 5c at a time (or better yet, 1c at a time on Schwab) until you get a fill. Then you can start buying or offloading around that price. Sometimes the first fill can be improved upon on subsequent buys/sells so I’ll generally just do 1 contract when I’m scouting the market, and then try to get a better fill with my volume.

[kevindenver]

I'm glad you are aware of liquidity risk and time decay. I think you made the right moves.

[mauismart]

Just the other day I bought the 6 dec calls for 2.40. I just kept buying them until the price went up

[Bourbon_on_my_cornflakes]

SMART MOVE:

I had been holding 180 extremely illiquid $8 Jan 2025 calls and, with no guarantee of a MAA being filed, I was getting worried that it wouldn't be too long before the premiums would start to rapidly erode eating away at my unrealized profits. On the other hand, I wanted to continue to hold them because I thought a filing of a MAA would likely result in a nice increase in the intrinsic value on a 1:1 $ basis. But when the price spiked over the past ten days, I decided not to let the opportunity pass to capture those profits since there is no certainty regarding a MAA filing.