How Does a Tighter Bid-Ask Spread Affect the Profitability of an Options Scalping Strategy?

A tighter bid-ask spread significantly increases the profitability of an options scalping strategy. Scalpers aim to profit from small, quick price movements, often holding positions for seconds or minutes.

A smaller spread means the transaction cost is lower relative to the target profit per trade. This allows the scalper to execute more profitable round-trip trades and reduces the minimum price movement required to break even.