I have one quick question about an options trade because it seems like a very good opportunity but I'm not sure if it will work. Their is a stock option which expires in this month with a strike price of $5 and this options' ask price is only 75 cents. The good thing about it is that the price of the actual stock is around $16.50. So if I by this option, can I exercise it to buy those shares for $5 and then sell the stock for $16.50 and can I do all of this on the same day, or is their a rule to options that would prevent me from doing this. Any help is greatly appreciated.
The first thing I would do is double check that your looking at a ITM CALL option and not an OTM put. If so then Tuesday you'll have to check as to whether that $0.75 quote is not an error. To answer your question american style options can be exercised early.
No I'm sure its a call option but it could be an error. I found it on yahoo finance, It's the option for activision (atvi)
http://www.cboe.com/DelayedQuote/QuoteTable.aspx I don't see a $5 strike quoted at the CBOE so it's probably an error.
Your right but for some reason yahoo has this option listed on its site. Would have been a great trade if it existed though
======= rj-jr CBOE /elitetraders are right . Option names/symbols will change but not like that YHOO pattern suggests; and put/call option chains hardly ever progress like that bad YHOO data-the correct progression on those puts/calls=$2.50 per strike price Right here is solution; bid/ask=.50/.75, but its a Jul call, on ENMC; and its sort of an unwritten rule, market makers will help you but seldom give away that % of free money. Both 1888options.com optionsxpress.com have usually good free data.