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 can’t find in the ‘surface’ literature (right now I’m starting with such) and need someone who is in ‘options theme’ 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 don’t tear me to pieces for that.

    Thanks to all in advance for the input (I hope I’ll get some)


    This is the “September 07 (ESU7)” ES call option. ES is currently trading at 1486.5

    Bid / Ask / Strike
    37.00 / 37.75 / 1470

    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)

    Intrinsic value = 16.5 points

    Can you tell extrinsic value from the quote?
  2. ?-------> Total Premium = Intrinsic Value + Extrinsic Value. Extrinsic Value equals 37.75 minus 16.50. EV = 21.25
  3. Bronce


    thank you (simple math works :) )