can someone plz help me with this: this is what i found on yahoo finance for call options on BAC. so does this mean that the asking price is $13.65 to buy the option to be able to buy 13.8 shares of BAC at $2.5 each? i just want to confirm if im reading this correctly. thanks. Strike Symbol Last Chg Bid Ask Vol Open Int 2.50 BYOLY.X 15.05 0.00 13.65 13.80 45 52
Looks to me that if you want to buy this option you’ll have to pay 13.80…i could be wrong though. Your broker should have an up to date quote, no?
Option contracts are traded in 100 share lots but are quoted per share so the above option costs $13.80 per share and gives you the right to buy 100 shares of BAC at $2.50 per share. The $13.65 is the price per share you can sell the option.
thanks. sorry yes i meant to say 13.80 not 13.65. im also confused about the Vol number, does that mean the number of shares i can buy with each option?
The Vol number is the number of contracts that have traded today.
thx tmurf
why would you ever buy these options? You might as well buy the stock - you are taking the first 85% of downside risk and only “saving” about a dime a share?
thx for the link. jason i dont plan on buying these options, was just trying to understand what they meant and how it worked. i am thinking about maybe buying BAC shares though.
its for the option of buying 100 shares at 2.50 and the option costs 1380 to buy.
JasonU Wrote: ------------------------------------------------------- > why would you ever buy these options? You might as > well buy the stock - you are taking the first 85% > of downside risk and only “saving” about a dime a > share? I surely am not buying, but you are getting some leverage (costs 13.80 to get vol on 15.05 of stock) and some downside protection (BAC goes to 0 and you lose 13.80 not 15.05). A big downside for me would be that I lose the option for tax-planning on an option expiring two weeks before the end of the year (I’m absolutely certain there are tons of people who have plenty of losses to offset that this year). Anyway, those are such compelling reasons that the open interest is 38 contracts.
Morningstar has an option tab that includes the greeks
just two more questions guys: 1) so i cant get an option to buy less than 100 shares? what if i just wanted the option to buy 50 shares at a cheaper option price? 2) how do i know if these are american or european options? thanks.
- Nope. They only trade in 100 share lots on the exchange. 2) These are european options.
thx tmurf but how do you know that they are european? is there something in that table to let me know?
Why do you think they’re European? Looks like they American to me.
NakedPuts Wrote: ------------------------------------------------------- > Why do you think they’re European? Looks like > they American to me. most are american… with the exception of index options
I think they are American too. Most exchange traded stock options are American. Hard to believe that you should buy an option on a $15 stock with strike of 2.50 and two weeks to expiration and care about early exercise. I guess there needs to be a dividend payment and the interest on the dividend is more than the cost of entering the position or something. Doubtful.
TMurf Wrote: ------------------------------------------------------- > 1) Nope. They only trade in 100 share lots on > the exchange. > 2) These are european options. 100% agree! Just be careful when there is merger/stock buyout in firms. Sometimes you can see “ns” next to an option quote, that stands for “none-standard”. Due to merger or stock buyout, sometime the lot can be more/less than 100 shares.
Oops. I stand corrected. They are american options. Like Joey and j-rad said, I think all or most exchanged traded options are american.