Looking at DECK to place a credit spread as suggested by OptionAlpha.com´s watch list. This was the only security that was not pending an earning report in the next 45 days so I thought it is a good candidate for a trade.
When I went to my trading view to see the option chain and check out the premium differences, I see that as we move out of the money on the strikes (downward) the premiums drop as expected, but then pick up dramatically again. This is not what I expect to see.
I know the liquidity is rather poor on all of these options, and the gap between bids and asks is rather large. And that these are just sellers on the orderbook, but is there something behind this that would be usefull to know and understand?
Does this happen often. What should I take away from this indicator? (see attached screenshot)
p.s. I subscribed to optionalpha because they touted that their super watchlist will automatically find me nice liquid securities and ETFs that are ideal for option trading. I would say seeing the options on DECK (second screenshot), at the strikes that they suggest, that this first experience with optionalpha´s wizbang watchlist is not really positive.