2 Reasons Why Every Option You Buy or Sell Starts in the Red

If you've ever bought or sold an option and watched it instantly flash red, you're not alone. The market hasn't even moved, yet your position is already losing money.

From the moment you open an options position, two things are working against you.

1. Bid-Ask Spreads Deliver an Instant Hit

Every option has two prices:

• The bid: what someone will pay you for it.
• The ask: what you must pay to get in.

That gap, the spread, is an automatic loss the moment you enter.

Example: if a call is quoted at $1.90 × $2.10 and you buy it for $2.10, you're instantly down about 10% before anything happens.

This is why professional traders obsess over liquidity and tight spreads. The spread shows up as red P&L before the trade even has a chance.

2. Commissions and Fees Erode from the Start

Even small commissions add up, especially for active option traders. Buy and close a four-leg spread, such as an iron condor, and you will be paying eight separate charges.

Those commissions are deducted the moment you enter, which puts you in the red from the start.