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How low the stock price would have to be for the time value of the option to be zero?
Wiki User
∙ 14y ago
It don't relate with price time value would be zero on last Thursday of the current month because it's the last limit till u have to suare up your position in the market otherwise broking house will do it..........
Wiki User
∙ 14y ago
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What was Brooklyn union gas stock price in May of 1983?
You can call 800-482-3628 - Option 2 - Option 2 - they will then prompt you to enter a six (6) digit date for the day you would like the closing price for. Hope this helps!
Explain what is ADR for stock Will it shows strength of stock if it is greater than 60 If it is 20 what does it mean it is weak stock?
See the explanation of American depository Receipt at: http://wiki.answers.com/Q/What_does_ADR_stands_for The actual price of the ADR means nothing in itself, just like the price of a stock doesn't. The number of shares, among other things, makes the stock price higher or lower without changing any real value. (A stock with a float of say 100 shares and a price of $100 as share, would be the same if the float was 1,000 shares but the price would then be indicated as $10 a share).
What is the avergae price of the Caterpillar stock?
The average price of Caterpillar stock would depend on the time frame one is calculating the price of Caterpillar stock. As pf July 12, 2013 the price of Caterpillar stock was $87.17 US Dollars.
Why would the GE stock fund not hold the same value per share as a GE stock?
GE Stock Fund is essentially a mutual fund that holds only GE Stock. Therefore the value per share reflects the net asset value of each unit of the fund, which is not the same as the share price of GE stock. The performance of the GE Stock Fund will closely track that of GE stock, less the operating and adminstration fees charged by the fund.
Why call option price cannot exceed the price of underlying asset?
Call options allow their buyers to purchase assets from a "counterparty" for a set price--which is called the "strike price." Say, 100 shares of Acme for $25 with expiration in June. The reason you buy this thing is because you think the price of the asset is going to go up. If Acme stock goes up to $27, you exercise your option and pay $25 per share. If you paid less than $2 per share premium, you'll make money when you sell the stock. If you exercised the option when Acme was $23, you'd pay $25 for $23 stock--which is a bad investment any way you look at it. Call prices CAN exceed the price of the underlying asset. It happens all the time, but no one exercises the options when they're like this because you would lose money if you did.
What does it mean when premiums are increasing in call options?
two possible reasons: 1. the underlying stock of the option is increasing in price value. 2. the volatility of the broad markets may be increasing. in this case, the stock may not even rise in price value but its call premiums would increase.
When should you not exercise a call option?
You certainly should not exercise a call option when the stocks price is above the strike price. If you really want the stock, go and buy it at the market price. For example, if you own an option with a strike price of $15 and the stock is trading at $9, why would you pay $15 to buy a stock that you could only buy or sell for $9. That would be irrational.
A call option on Bedrock Boulders stock has a market price of 7 The stock sells for 30 a share and the option has an exercise price of 25 a share What is the exercise value of the call option?
There's intrinsic value and extrinsic value in options. Intrinsic value is the either the stock price minus the exercise price, or the other way around depending on which way the stock is going to travel. In the case of this call, if I exercised at $25 and sold at $30, the intrinsic value is $5 per share. To calculate extrinsic value, subtract the premium from the intrinsic value. On this deal, you paid seven dollars to make five so the exercise value, or extrinsic value, of this option is negative two dollars. The idea of buying calls is to MAKE money so most people would look at this one close: is the stock going to clear $32 before the option expires? Thirty-two dollars is the break-even point so if you couldn't be sure of being able to sell the stock for more than that you'd be best off to pass on the deal.
What is the difference between a call option and a put option?
A call option gives the option buyer the right, but not the obligation, to buy a certain amount of stock on or before a certain date for a certain price. A put option gives its buyer the right, but not the obligation, to sell stock on or before a certain date for a certain price. How the options are exercised is another difference. If you bought a put, you're hoping the stock price falls below the strike price--the certain price in the contract. It would make no sense to sell stock for $10 a share if it's $15 now, right? Calls exercise when their stock price goes above the strike price.
Where can I find advice on stock option value?
You can receive excellent advice on stock option value at ultimateoptionstrategies.com or at ezstockoptions.com. There are also many more sites that would help but these are the most related to you're search.
Can the vale of call option be negative?
No. The value of a call option can never be negative. For example, let's say that one has a call option on FOO with a strike price of $30 and the option expires at the end of the day. If the underlying price of FOO shares are below $30, the price of the option will be very near $0 (because no one would pay much for the right to pay for an underwater option), but there is still a chance that the stock will go above $30 (no matter how remote). If the underlying price of FOO shares are at $30, the price of the option will be low, but positive (because there is a chance that the stock will go above $30. If the underlying price of FOO shares are above $30, the price of the option will be slightly higher than the difference between the strike price and the share price (because there is so little time left for changes; however, there will be some time value as suggested in the examples above).
What is the meaning of Employees stock option plan?
An Employee stock option is a call option on a company's own stock issued as a form of non-cash compensation. A stock option granted to specified employees of a company. ESOPs carry the right, but not the obligation, to buy a certain amount of shares in the company at a predetermined price. When the employees exercise their stock options, shares would be issued and thus, outstanding shares would increase.
If a itm call option is 9 and the share is trading at 10 it is itm but why do you say that a 9 put is otm if the share price is 10 what is the history to this seemingly inconsistancy?
When a stock is at $10, a $9 strike price call option allows you to buy that stock at $9, which is $1 cheaper than the market price, hence it is in the money (ITM).Now, when a stock is $10, a $9 strike price PUT OPTION allows you to SELL that stock for $9 when you can actually sell it for $10, so there's no value in it, right? (why would anyone want to sell a stock at $9 when he can sell it for $10, right?) That is why it is out of the money (OTM).It is not an inconsistency but that you did not understand that options moneyness for call and put options are the reverse.
How is it possible for an employee stock option to be valuable even if the firms stock price fails to meet shareholders expectations?
Stock options are in essence the right to buy a specified number of shares at a specified price (known as the "strike price") within a specified period of time. If at any given point the current price of a share of stock is higher than the strike price, the options have value. Both stock price and shareholder expectations tend to fluctuate, and not always in the same direction at the same time, so it's quite normal for the two to be at least temporarily out of alignment. Think of it this way. The value of the options is based on the difference between the current stock price and the strike price, while shareholder expectations are based on what shareholders collectively thought the stock should or would be worth. If a share of stock is worth more than the strike price, but less than the shareholders were expecting, it would result in the situation you describe.
What is an option?
An option is the right to buy or sell the underlying commodity (e.g., stock) during a specific future time at a predetermined price. The price or cost of an option is called a "premium". The factors which determine an option's value are: 1. Price of the underlying 2. Time to Expiry 3. Strike of the option 4. Volatility of the underlying General Electric stock is currently trading at $34.00. You purchase a Call option ("right to buy") X shares of GE stock at $30.00 on 17 Nov 2006. Underlying = X shares of General Electric Stock Strike = $30.00 Expiry = 18 November 2006 Option Cost: $4.70 (1) At expiry: GE Stock is $40.00. You "exercise" your option: Buy the stock at $30.00, then sell the stock at $40.00, to make $10.00 on the exercise. Your profits are: $10.00 - $4.70 (cost of option) = $5.30 per share (2) At expiry: GE Stock is $28.00. You could buy the stock at $30, but then you'd lose $2.00 per share! Your options expire worthless, and you have lost the money you paid for the options. If the price of GE is only $34.00 today, why would you pay $4.70 for the right to buy it at $30.00? ($34.00 strike - $30.00 current price = only $4.00!) The answer is that we don't expect a stock price to remain constant over time. This is where uncertainty comes into play. Uncertainty has value. A stock price is volatile. Think about it: would you expect GE share price in a month to be exactly the same price it is today? No. So there is a good chance that the price will be above $34.00 (or below $34.00). Along these same lines, the more time there is between now and expiry, the more uncertainty there is. Therefore, time and volatility play a big role in how an option is valued. Going back to GE, we can easily see the time value reflected in the price of an option with the same strike but different expiry. The extra month of time is worth $0.30 upfront cost. Underlying = X shares of General Electric Stock Strike = $30.00 Expiry = ** 18 November 2006 ** Option Cost: $4.70 Underlying = X shares of General Electric Stock Strike = $30.00 Expiry = ** 18 December 2006 ** Option Cost: $5.00An option grants the holder the right but not the obligation to buy or sell the underlying stock at a fixed price by a fixed date.As options only cost a fraction of the price of the underlying stock, it is commonly used as a speculative leverage instrument.that you think what you think
What is an option to sell?
An option to sell, sometimes referred to as a "put" option, gives the owner of the option the right to sell "something" to a designated buyer at an agreed price on an agreed date, or within a specified date range. The "something" can be one of a wide range of tangible or intangible assets. For example it could be oil, gold, shares in a company, wine, wheat, currencies, or even a stock market index such as the S & P 500 or the FTSE100. The list is endless. A US farmer, preparing for his corn harvest in the coming season, can "lock in" the value of his crop by taking out an option to sell an agreed amount at an agreed price. This way, he gets certainty of income and predictability as to price. Of course, if the market price on the day he sells his crop has risen to a value higher than his option price, then he will forego some income. But if the market price is below his option price, then he will receive a higher price than he would in the open market. In more sophisticated trading, such as strategies employed by some hedge funds, one does not need to own the underlying asset to purchase an option to sell. For example, a trader might purchase an option to sell stock in company X in 6 month's time at a stock price of $50. He does not need to own the stock now. If he believes that the stock price in 6 months will be $40, and the option costs $5 per share, then he will pay $5 per option now; buy the shares for $40 and immediately sell them for $50 in six month's time; and make a net profit of $5 on a $5 investment over six months. Of course, if the stock has risen to $60 when the option is exercised then he will be $15 out of pocket.
Do you have to exercise incentive stock options if market price is lower than granted price?
No, and you shouldn't. If the strike price of your option is $10 per share, and the stock is currently trading at $9, exercising it would get you nine-dollar stock for $10 per share. This is what we options fans call a very bad thing.
