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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?
Wiki User
∙ 15y ago
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.
Wiki User
∙ 15y ago
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On 1st January a three month call option on the nifty with a strike of 4280 is available for trading the 't' that is used in the black scholes formula should be?
0.25
What are the differences between future and option contract?
There's one main difference and it's huge: An option contract gives the person who buys it the privilege of doing whatever it is the contract is written for. A futures contract imposes an obligation on the buyer. There are also liquidity requirements and requirements to pay performance bonds in futures trading that don't exist in options trading, but the real basic difference is that an options buyer can do something and a futures trader has to.
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While the CALL options remain the same for both regular and binary options, the difference being that with binary options you don't actually own the asset you are trading on. It is based on mere speculation of the market movements.
What is the minimum value of a call option?
The minimum value of a call option is zero. Why is that? Because options lose value with time until they expire on their pre-determined expiration date. Upon expiration, if the price of the underlying stock is less than the strike price of the call option, then the call seller gets to keep the premium received, whereas the call buyer has lost all the money paid for the option. For additional education there are many good websites to consult. One site of interest ishttp:/www.safe-options-trading-income.com.
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As far as I know there isn't a "buy option," but a call option is an option to buy so I guess you could think of it as a "buy option."
How can someone get into a company that does forex option trading?
You would want to speak to someone about forex option trading. The two primary options are called spot, or single option trading, and call/put option. You can make a very good amount of money if you invest it into trading.
Does the website for Option Trading Strategies offer free advice?
The site Option Trading Strategies Does does offer free advice for individuals that seek it. Option Trading Strategies is utilized by many individuals.
How do you register for option trading?
You can actually easily register for option trading online on your computer. There are a couple different companies offering free trials such as Emini Trading.
Where can one find free option trading strategies?
There are many resources online that provide free option trading strategies. Another avenue is to contact your bank and inquire about trading with a financial advisor.
Where can one engage in options trading?
One can engage in option trading on E*Trade.
Where can you learn about option trading?
You can learn about option trading by taking a local college course on the subject. You could also contact a private investor to ask him/her about it.
Where can one purchase the Option Trading System online?
A person can purchase the Option Trading System online from several different places. Some of these places include Trade Dominator and Options Trading Authority.
How does one find more information about option trading strategy?
One can find more information about option trading strategy at the Option Playbook. On this website, it is sorted by skill level and legs. There are 40 different strategies.
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Currency option trading is a common term used in financial discussions between business people. They are referring to trading currencies on the market to hedge their risk.
What is Option Trading?
Option Trading is the contract to give the buyer the right but not the obligation to to buy or sell an asset at a specific price or or before a certain date. It is also a binding contract with strictly defined terms and properties.
What is a commodity option trading system?
In commodity option trading each contract will have a different implied volatility. Traders in commodity options have a different perception of risk in that it is bi-directional.
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