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# My beginner questions

Discussion in 'Options' started by Bronce, Sep 4, 2007.

1. ### Bronce

Greetings to everyone,

I am very new to options. Planning to start very slow and very small.
Form time to time I get some questions, answers to which I canât find in the âsurfaceâ literature (right now Iâm starting with such) and need someone who is in âoptions themeâ to help me with them. It could also be some points on which I might need confirmations from options folks.
I am planning to put such questions in this thread from time to time, and would really appreciate time of those who reply.

Questions are very simple. Please donât tear me to pieces for that.

Thanks to all in advance for the input (I hope Iâll get some)

QUESTION#1

This is the âSeptember 07 (ESU7)â ES call option. ES is currently trading at 1486.5

37.00 / 37.75 / 1470

#1. THE VALUE OF OPTION
To get the number for the value (assuming I want to buy at the market) I need to multiply the ask by 50. Is this correct?
(So in this particular case the premium I would have pay would be equal to 37.75*50 = \$1887.5)

#2. INTRINSIC & EXTRINSIC
Intrinsic value = 16.5 points

Can you tell extrinsic value from the quote?

2. ### nazzdack

?-------> Total Premium = Intrinsic Value + Extrinsic Value. Extrinsic Value equals 37.75 minus 16.50. EV = 21.25

3. ### Bronce

thank you (simple math works )

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