My rule of thumb on open interest is that it must be at triple digits in the strike price range I would be interested in using in a trade, generally out from the money to the 85% chance of expiring out of the money point.
That leaves no viable prospects, and I have no plans to analyze potential new positions today.
-- Tim Bovee, Portland, Oregon, Feb. 29, 2016
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
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Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.License
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