Bid-Ask Spread Filter: Stop Bleeding Money on Slippage

Why the spread is your hidden cost

Every option has a bid (what buyers pay) and an ask (what sellers charge). The spread is the difference. When you sell, you're hoping to fill near the mid:

Mid = (Bid + Ask) ÷ 2

If the spread is $0.05, you typically fill within a penny of mid. If the spread is $0.50, you might lose 10–25% of premium just to the spread.

Where to find it

The Bid-Ask Spread filter is in the sidebar of both screeners. It's measured in cents and goes from 0¢ to 100¢+ (the "+" bucket means "any spread").

Recommended caps

A simple rule: spread ≤ 5% of mid premium is excellent, 5–10% is acceptable, > 10% is poor.

A worked example

You're hunting $1.50 puts on small-cap names. Spreads matter a lot here.

1. Open the Put screener.
2. Set Premium to $1.00 – $3.00.
3. Set Bid-Ask Spread to max 8¢.
4. Set Volume ≥ 100.

Now every row has a tight enough quote to fill within a penny of mid.

When wide spreads are OK

There are two situations where you can ignore wide spreads:

• You're holding to expiration. If you never plan to close, the spread on entry is your only exposure.
• You're using a marketable limit. On expensive contracts you can sometimes split the spread by a few cents and still get filled.

For everyone else, tight spreads = clean trading.

Common mistakes

1. Looking at ratios, not absolutes. A 5¢ spread on a $0.20 option is 25%. A 5¢ spread on a $5.00 option is 1%. Always think in percent of premium.

2. Ignoring quote depth. The displayed bid/ask might be for 1 contract. If you want 10, you may have to walk further.

3. Believing "the mid will fill". On illiquid contracts, the mid is often a fiction. Use the Options Liquidity Checker to peek at recent prints.

Where to go next

• Pair with Volume filter for full liquidity coverage.
• Use Liquidity Cleanup toggle for one-click defaults.
• Check any contract with the Options Liquidity Checker.