Whats up with RF?

Discussion in 'Options' started by pandorasbox, Apr 13, 2007.

  1. I was looking to short some puts and came across the 7.2 premium for the June 35 put, which comes out to a 20% yield. The stock would have to close below 27.8 by June expiration in order for me to loose, what am I missing here??
  2. Div_Arb


  3. I don't see it on IB either. I use TS to scan for options and they show RF has a June expiry, but not IB, hmmm weird. Then again I only see 3 contracts as OI in TS so I don't know.
  4. MTE


    Those are non-standard options, check CBOE for contract adjustments notes.
  5. nikko309


    It's an adjusted contract. From the numbers in thegazelle's link, that contract is worth about $2,767 (stock + cash) so if the Jun 35p is bid $7.20, it's trading under parity. IOWs, you'll be paying $2,780 for something currently worth less, ignoring commissions.

    If it looks too good to be true, it usually is :)