How to Read a TRADE
XYZ AUGUST 70 CALL AT $3.10
where XYZ is the name of the stock
August is the expiration date
70 is the strike price
Call is the option type
$3.10 is the premium
Buyer - LONG - buy to open - debit
Buyer - LONG - sell to close - credit
Seller - SHORT - sell to open - credit
Seller - SHORT - buy to close - debit
![]()
How to Read an Option Pricing Diagram
Where option expires on the 1st Friday of April 2017
10 days left
"100" represents the multiplier. i.e 1 option rep 100 underlying shares
Weekly option. If NO indication, means monthly option
* Monthly option expires on the 3rd Friday of the month
Option Pricing and the Greeks
where IV is impacted by SPOT and STRIKE price
where Time Value of Money is impacted by - Time Value of Money - further from expiration, more valuable the option
- Higher Volatility - higher option price
- Interest Rate - Not much impact for options that have > 60 days to expiration
August is the expiration date
70 is the strike price
Call is the option type
$3.10 is the premium
Buyer - LONG - buy to open - debit
Buyer - LONG - sell to close - credit
Seller - SHORT - sell to open - credit
Seller - SHORT - buy to close - debit
How to Read an Option Pricing Diagram
APR 17 (10) 100 (weekly)
Where option expires on the 1st Friday of April 2017
10 days left
"100" represents the multiplier. i.e 1 option rep 100 underlying shares
Weekly option. If NO indication, means monthly option
* Monthly option expires on the 3rd Friday of the month
Option Pricing and the Greeks
Pricing = IV + TVM
where IV is impacted by SPOT and STRIKE price
where Time Value of Money is impacted by - Time Value of Money - further from expiration, more valuable the option
- Higher Volatility - higher option price
- Interest Rate - Not much impact for options that have > 60 days to expiration
No comments:
Post a Comment