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How Does the Size of the Option Contract Affect the Bid-Ask Spread?

Larger, more frequently traded contract sizes and strikes generally have a narrower bid-ask spread due to higher liquidity.
Greeks.Live23.11.25

How Does the Size of the Option Contract Affect the Bid-Ask Spread?

Option contracts with larger notional sizes (e.g. a contract for 1 BTC vs. 0.1 BTC) or for highly-traded strike prices generally have a narrower bid-ask spread due to higher trading volume and market maker focus.

Conversely, options with small notional sizes or exotic strike prices are less frequently traded, leading to lower liquidity and a wider bid-ask spread.

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