4. More Basic Options Concepts

The price of an option comes with a bid and an ask price, the bid price represents the highest price a buyer is willing to pay. While the ask price represents the lowest price a seller is willing to accept.
Buying an option and inmedialty selling it would create a loss equal to the bid/ask spread, this is called slipagge

The formula for the bid/ask spread

Bid/Ask spread as a percentage of the asset price

When buying options, a bid/ask spread of less than 5 percent is an indicator of good liquidity, with a limit of 10 percent

Open interest is the total number of outstanding derivative contracts. Open interest keeps track of every open position in a particular contract, rather than tracking the total volume traded in it. Thus, open interest can provide a more accurate picture of a contract's liquidity and interest

The term exercise by exception refers to the automatic exercise of in-the-money options at expiration. The Options Clearing Corporation (OCC) institutes exercise by exception unless explicit instructions prohibit exercising the option. If you forget to sell or exercise your ITM options and they are about to expire, the broker will excercise your options automatically on expiration day.