Hi, what do such big differences in premium for practically the same options mean: 1.) finance.yahoo.com says: http://finance.yahoo.com/q?s=MSFT121222P00030000 MSFT Dec 2012 30.000 put (MSFT121222P00030000) -OPR Last: 1.50 0.15(11.11%) 1:50PM EDT Prev Close: 1.35 Open: 1.30 Bid: 1.52 Ask: 1.54 Strike: 30.00 Expire Date: 21-Dec-12 (prices in USD) 2.) At a German broker: https://boerse.dab-bank.de/maerkte-kurse/hebelprodukte/hebelprodukte-suche/id_55608325.html UBS AG (LONDON BRANCH) PUT 17.12.12 MICROSO. 30 Stammdaten zu UBS/PUT/MICROSOFT CORP. REGISTERED SHARES DL-,00000625/30/0.1/17.12.12 WKN: UU8GWC | ISIN: CH0143730502 | Kategorie: Optionsscheine | Produktgruppe: OPTIONSSCHEIN | Emittent: UBS AG, London Branch | Basiswert: MICROSOFT CORP. REGISTERED SHARES... Produkttyp: PUT Ausübungsart: Amerikanisch Basispreis: 30,00 USD Dieser Optionsschein wird fällig am 27.12.2012 (in 70 Tagen). The emittent UBS AG (ie. like an ECN) has these prices: Bid: EUR 0,12 Ask: EUR 0,13 Last: EUR 0.125 (prices in EUR) Why is there such a gigantic difference in the premiums of these Microsoft (MSFT) put options for Dec 2012 ? And, isn't that a big arbitrage opportunity?...
Not speaking German but they look like two different options with different expiry dates. (17/12 the german vs 21/12 the american) There's still big price difference but this might be simply different multipliers eg 100x vs 10x plus the currency difference
You could be right as there is a column saying "Bezugsverhältnis: 1:10" ie. one has to multiply the price by 10 and then it becomes comparable to the other.