Options Price mystery (?)

Discussion in 'Options' started by mayorq, Jun 5, 2012.

  1. TskTsk

    TskTsk

    Most of the weekend theta gets discounted on Thursday and Friday. There is some discounting over the weekend, but that's the price of gap risks etc that market makers price in.
     
    #11     Jun 7, 2012
  2. The mystery is why are you trading options without understanding this first?

     
    #12     Jun 7, 2012
  3. donnap

    donnap

    Since the drop in price was intraday, it is attributed to a drop in IV. But that is just how it is measured.

    Whatever reason that you want to attribute to the drop is discretionary. Time decay, drop in vol, MMs playing games.

    Since it is front month, and the measurement is from near the open to close, time decay is a reasonable assumption.

    Had the option price been exactly the same would you then conclude that there was a rise in vol?
     
    #13     Jun 7, 2012
  4. Options Price mystery (?)
    No mystery.

    Buyer vs. Sellers
    When more are Buying than Selling, it goes up.
    When more are Selling than Buying, it goes down.

    Why?
    Buyers want to Buy.
    Sellers want to Sell.

    But, really, why?
    Supply and demand.
    Perceived bargain.
    Locking-in profits.
    Impatience.
    Inexperience.
    And also...
    Because they are a nerd who loves "BS" math.

    (BS means Black Scholes?)
     
    #14     Jun 7, 2012
  5. interesting
     
    #15     Jun 10, 2012
  6. it's be easier to just give your money to charity... and you would feel better also !

    bonne chance
     
    #16     Jun 11, 2012