Are there different markets between option writing and buying?
Looking at the option chain I see short term (30 days) deep out of the money calls with volume for strike 55 with volume at 16, with Bid/Ask at 0.30/1.00:
However, the time and sales window notes two transactions that makeup that volume measure:
As evidenced from these two transactions, the first (at 10:36am) transactions bid/ask market spread is 0.45/1.00 while the second (at 10:40am) is 0.40/0.45.
why and how can the the respective transactions markets be so different? Is this evidence that one is Sell to Close, the first at (at 10:36am), and the other is Sell to Open, the second (at 10:40am)?
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With stocks, at the end of the day, traders pull their orders because they don't want any after hours surprises. Options behave similarly except that they don't trade during after hours. In both cases, the B/A spread widens, perhaps very little with very liquid options like those of the SPY and for those that trade by appointment (illiquid), the spread can be Holland Tunnel wide like the one that you observed. When the market opens in the morning, the B/A spread remains wide until competitive orders are submitted and then the the spread narrows. Don't read anything into the wide spreads. They're not transaction only a lack of existing orders.
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