An Option Trade question

Discussion in 'Options' started by rjjr, Jul 3, 2005.

  1. rjjr


    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.
  2. Lucrum


    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.
  3. KevinK

    KevinK Guest

    If it's a legitimate option, it is most likely a put not a call.
  4. rjjr


    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)
  5. Lucrum


  6. rjjr


    Your right but for some reason yahoo has this option listed on its site. Would have been a great trade if it existed though
  7. =======
    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.

    have usually good free data.