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Covered call writers & sellers of cash-secured puts generate cash flow by selling options, leveraging elite-performing stocks and ETFs. Options prices are published in option chains in the form of bid-ask spreads. We sell at the “bid” price and buy at the “ask” price. The range between the bid and ask is known as the bid-ask spread. The wider the spread, the more profit for the market-makers. This article will analyze how we can negotiate better option prices leveraging the SEC’s Show or Fill Rule.

Examples of tight and wide bid-ask spreads (brown cells)

• Note the tight bid-ask spreads for IBIT (brown cells on top) and the substantial open interest (liquidity- pink cells on top)
• Note the wide bid-ask spreads for PLMR (brown cells on bottom) and the deficiency of open interest (liquidity- pink cells on bottom)

What is the Show or Fill Rule?

• Leveraging the Show or Fill Rule, also called the “Limit Order Display rule,” is an option trading strategy where a trader sets a limit order that must either be displayed on the market order book (option chain) or immediately executed (filled) by a market maker
• This action forces the market-maker to either fill the order immediately or publish the order, decreasing the bid-ask spread
• This can assist traders negotiate better prices by forcing market-makers to decide to execute smaller orders at the better price or decrease the published spread
• I view this SEC rule particularly useful to retail investors who are executing small numbers of option contracts

Real-Life Example with Veeva Systems Inc (Nasdaq: VEEV)

• Find the “mark” (midpoint of the spread): $6.40
• Drop down a bit in the limit order to slightly favor the market-maker: $6.35
• Enter a limit order, not a market order, at $6.35 (Day order, not good until cancelled)
• If the broker platform displays an All or None (AON) Box, do not check it
• Some brokerages negotiate for us, but using this methodology will ensure best price executions
• Use for spreads > $0.10

Broker Trading Platform: Entries for VEEV

• #1: Enter ticker & type of option
• #2: Enter action desired and the # of contracts
• #3: Enter limit order, price and day order
• #4: Enter desired expiration date and strike price
• The bid-ask spread is shown in the red oval

What if the $6.35 Order is Not Executed?

• The new published spread is $6.10 – $6.35
• Find the mark: $6.22
• Drop down to favor the market-maker: $6.20
• Enter a limit order at $6.20
• If that order is not executed, go with the published bid of $6.10

Discussion

• Leveraging the SEC’s Show or Fill Rule will put cash in our pockets
• It is effective, most of the time, when the principles in this discussion are followed
• The worst-case scenario is going with the published bid price which may meet our pre-stated initial time-value return goal range
• Remember not to check the All or None (AON) Box, if on the broker trading platform

This is a unique tool that is used to manage covered call writing and selling cash-secured put trades from start-to-finish. To our knowledge, it’s the only one of its kind anywhere.

The TMS consists of 4 tabs:

• TMC
• TMC user guide
• “What Now Worksheet” tab for covered call writing
• “Unwind Now Worksheet” tab for covered call writing

The TMC is the” meat and potatoes” of the TMS. It has 2 main sections: one for covered call writing (top of spreadsheet) and one for selling cash-secured puts (lower half of spreadsheet).

Each of these sections is divided into 4 sections + a trade journal that flow left to right in the same sequence as we enter and manage our trades:

• Opening trade entries
• Opening trade and total portfolio initial calculations
• Exit strategy trade adjustment entries
• Exit strategy calculations & final combined trade results for both individual trades and total portfolio results.

Click here for more information and 2 videos.

Your generous testimonials

Over the years, the BCI community has been incredibly gracious by sending our BCI team email testimonials sharing stories as to what our educational content has meant to their families. Moving forward, we have decided to publish several of these testimonials in our blog articles. We will never use a last name unless given permission:

Upcoming events

1. BCI Educational Series Webinar # 8: New Credit Spread Calculator

Thursday September 18,2025

8 PM ET – 9:30 PM ET

Over the past 2 years, BCI has been developing and beta-testing a 1-of-a-kind spreadsheet for entering and adjusting our credit spread trades. Like our Trade Management Calculator (TMC), our goal was to make it the industry standard. Only you can decide if we accomplished our mission.

Alan & Barry will introduce this product, review all the tabs inherent in the spreadsheet and demonstrate how to use it. A 1-time early order discount will also be offered.

For those who trade, or are interested in learning how to trade, credit spreads, this is a must-see webinar.

More details and registration information to follow.

2. Orlando Money Show

Orlando Resort @ ChampionsGate

October 16 – 18, 2025

• Opening ceremony keynote address
• 2-hours Master’s Class
• 45-minute workshop class

Details and registration link to follow.