Illiquid Option
Definition of 'Illiquid Option'An option contract that cannot be sold for cash quickly at the prevailing market price. Illiquid options have very low or no open interest. |
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Investopedia explains 'Illiquid Option'Most options are illiquid when they are far away from their expiration dates. If you're holding an illiquid option, you will usually notice a very large bid-ask spread on the contract. This is because there are not enough buyers to accommodate those wanting to sell.Unfortunately, if you are trying to sell an illiquid option, there is a good chance you'll be selling at a discount, if at all. |
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