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Finding the underlying stock value of a call option?


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Finding the underlying stock value of a call option?

  #1 (permalink)
brags
Vancouver
 
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Nm...the "call price" is what I am looking for.

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  #3 (permalink)
 choke35 
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As an example the pic shows the front option series for AAPL.
Left side are the call prices, right side the put prices; multiplier is 100.

I.e.: You would have paid 2.68$ (ask) for the right to buy AAPL on 9/25 @112 (last AAPL price: 113.45).

Since your question is very basic, a well-meant bit of advice: Try to learn the option basics via Google or one of the
thousands of books about it before putting money on the line.


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  #4 (permalink)
brags
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Ok thanks for the example..so the value of the option is $114.68 per share.

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  #5 (permalink)
 
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 shodson 
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brags View Post
Ok thanks for the example..so the value of the option is $114.68 per share.

You can exercise your option anytime you want. It doesn't make sense to do so unless the stock is above the "strike" price, otherwise you're overpaying for the stock.

You should really go learn some basic options concepts. The OIC has some great, free resources.

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  #6 (permalink)
 choke35 
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brags View Post
Ok thanks for the example..so you would not get value from purchasing the option until AAPL reaches 114.68 or higher?

If the call expires on 9/25 and AAPL is below 112, you lose the the complete call price.
Between 112 and 114.68, you have a partial loss. Commissions ignored, you're in the black
above 114.68.

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  #7 (permalink)
brags
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I have done a lot of tutorials and these are concepts that I am not quite clear on.


choke35 View Post
If the call expires on 9/25 and AAPL is below 112, you lose the the complete call price.
Between 112 and 114.68, you have a partial loss. Commissions ignored, you're in the black
above 114.68.

Thanks...that is exactly what I was trying to determine. So why don't they just include the 114.68 in the option chain so you can see it at a glance?


Bid:2.65 Ask:2.68 Strike price:112 Buying price:114.68

Quick question...if I purchase the option, and then exercise my right to buy... where do the shares come from?

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  #8 (permalink)
 choke35 
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brags View Post
I have done a lot of tutorials and these are concepts that I am not quite clear on.



Thanks...that is exactly what I was trying to determine. So why don't they just include the 114.68 in the option chain so you can see it at a glance?


Bid:2.65 Ask:2.68 Strike price:12 Buying price:114.68

Quick question...if I purchase the option, and then exercise my right to buy... where do the shares come from?

For efficient front ends showing break-evens at expiry is only a waste of space,
since most options expire worthless or are closed before the expiry.

Most options are never exercised; if they do, the shares normally come from covered positions, i.e. stocks that
are owned by institutions that increase their returns by writing options.

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  #9 (permalink)
brags
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choke35 View Post
For efficient front ends showing break-evens at expiry is only a waste of space,
since most options expire worthless or are closed before the expiry.

Fair enough

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  #10 (permalink)
 grausch 
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brags View Post
I have done a lot of tutorials and these are concepts that I am not quite clear on.



Thanks...that is exactly what I was trying to determine. So why don't they just include the 114.68 in the option chain so you can see it at a glance?


Bid:2.65 Ask:2.68 Strike price:112 Buying price:114.68

Quick question...if I purchase the option, and then exercise my right to buy... where do the shares come from?

Remember, a call option grants the right, but not the obligation to buy the underlying. The option is a separate financial instrument from the underlying, with its own characteristics, therefore you will not see a "Buying price" of 114.68 in the options chain.

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Last Updated on September 21, 2015


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