You ever look at your account right after the opening bell and think something is broken?
You’re staring at a number that makes no sense. You sold a put spread yesterday, and now your screen says you’re up 200% on it. On a sold spread. Which is obviously not how reality works.
Then, 10 minutes later, it snaps back to something like 14% or 15%, and you realize you just spent the start of the trading day reacting to numbers that weren’t real.
This happens because options don’t trade cleanly at the open. Bid-ask spreads are wide, liquidity is thin, and market makers are still adjusting their books. What you see in that window isn’t true price discovery — it’s a temporary distortion while everything wakes up.
Options Are a Different Animal at the Open
Options need time to settle into fair value. In those first few minutes, pricing is unstable, and that instability can produce readings that look extreme but don’t reflect actual executable prices.
Spreads widen, quotes lag, and for a short period, the market is essentially guessing where things should be. That’s why a spread you sold can briefly show a massive gain or loss — the model isn’t broken, it’s just working with incomplete information.
After roughly 10 minutes, things start to normalize. Liquidity returns, spreads tighten, and the pricing you see begins to reflect something closer to reality.
That’s also why stops at the open can be dangerous. If your data is distorted, your execution will be too, and you can get forced out of trades that are perfectly fine once the market stabilizes.
Why I Don’t React in the First 10 Minutes
I don’t make decisions in that window. I don’t celebrate gains, and I don’t panic over losses. It’s too early for the numbers to mean anything useful.
Once the market settles, then I look at positioning and risk. That’s when the data becomes trustworthy enough to act on.
If you’ve ever been shaken by wild swings right at the open, this is usually why. It’s not your strategy breaking down — it’s the structure of the options market temporarily distorting reality.
Give it time to settle, then trade what’s actually there.
Geof Smith
Geof Smith Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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