Add training workflow, datasets, and runbook

training_data/curated/text/da5bac7a59ad653a0aea32eaeae82fd34b1cd7ded6779070cc0b8fc322b3f2c6.txt

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+148  •   The Intelligent Option Investor
+paragraphs. The easiest way to think of the bid-ask spread is to think in 
+terms of buying a new car. If you buy a new car, you pay, let’s say, $20,000. 
+This is the ask price. Y ou grab the keys, drive around the block, and 
+return to the showroom offering to sell the car back to the dealership. The 
+dealership buys it for $18,000. This is the bid price. The bid-ask spread is 
+$2,000 in this example.
+Bid-ask spreads are proportionally much larger for options than 
+they are for stocks. For example, the options I’ve highlighted here are on 
+a very large, important, and very liquid stock. The bid-ask spread on the 
+$32-strike call option (which you will learn in the next section is exactly 
+ATM) is $0.02 on a midprice of $1.09. This works out to a percentage bid-
+ask spread of 1.8 percent. Compare this with the bid-ask spread on Ora-
+cle’s stock itself, which was $0.01 on a midprice of $31.855—a percentage 
+spread of 0.03 percent.
+For smaller, less-liquid stocks, the percentage bid-ask spread is even 
+larger. For instance, here is the option chain for Mueller Water (MW A):
+2.5
+5
+7.5
+10
+Last
+C5.30
+C2.80
+0.55
+C0.00
+Change Bid AskI mpl. Bid  Vol. Impl. Ask  Vol. Impl. Bid  Vol. Impl. Ask  Vol.Delta
+2.5
+5
+7.5
+10
+2.5
+5
+7.5
+10
+12.5
+DescriptionCall
+Last Change BidA sk Delta
+Put
+C0.00
+C0.00
+C0.25
+C2.25
+C0.00
+C0.00
+C0.55
+C2.35
+C0.00
+C0.10
+C0.85
+C2.55
+C4.80
+5.20 5.50 N/A 340.099% 0.9978
+0.9978
+0.7330
+0.1316
+0.9347
+0.8524
+0.6103
+0.1516
+0.9933
+0.9190
+0.6070
+0.2566
+0.1024
+142.171%
+46.039%
+76.652%
+N/A
+N/A
+2.95
+0.55
+0.10
+0.20
+0.10 N/A
+N/A
+N/A
+0.10
+0.30
+2.35
+40.733%
+N/A
+N/A
+N/A
+N/A
+36.550%
+38.181%
+35.520%
+35.509%
+35.664%
+2.10
+0.50
+0.05
+0.10
+0.60
+2.402.30
+0.05
+0.15
+0.15
+0.85
+2.60
+4.90
+0.70
+2.45
+4.60
+2.70
+0.500.00
+5.20 5.50
+3.00
+0.90
+0.20
+2.80
+0.80
+0.10
+5.505.10
+3.102.85
+1.151.05
+0.400.30
+0.200.05
+39.708%
+N/A
+N/A
+36.722%
+N/A
+38.754%
+38.318%
+39.127%
+36.347%
+36.336%
+292.169% 0.0000
+-0.0000
+-0.2778
+-0.8663
+-0.0616
+-0.1447
+-0.3886
+-0.8447
+-0.0018
+-0.0787
+-0.3890
+-0.7375
+-0.8913
+128.711%
+53.108%
+88.008%
+117.369%
+60.675%
+42.433%
+44.802%
+110.810%
+50.757%
+42.074%
+43.947%
+49.401%
+163.282%
+75.219%
+42.610%
+45.215%
+122.894%
+64.543%
+42.697%
+44.728%
+50.218%
+C5.30
+C2.80
+C0.85
+C0.10
+C5.30
+C1.10
+C0.35
+C0.10
+3.00 +0.15
+AUG 16 ´13
+NOV 15 ´13
+FEB 21 ´14
+Looking at the closest to ATM call options for the November expiration—
+the ones struck at $7.50 and circled in the screenshot—you can see that 
+the bid-ask spread is $0.10 on a midprice of $0.85. This works out to 11.8 
+percent.
+Because the bid-ask spread is so very large on option contracts, 
+round-tripping
+1 an option contract creates a large hurdle that the returns 
+of the security must get over before the investor makes any money. In the 
+case of Mueller Water, the options one buys would have to change in price 
+by 11.8 percent before the investor starts making any money at all. It is for 
+this reason that I consider day trading in options and/or using complex