88E 50.0% 0.3¢ 88 energy limited

Exercise options, page-80

  1. 10,370 Posts.
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    Dear Mr. Smarty Spikeup,

    With the assumption that time value is ZERO and the head price is 0.029 (buy side) and option price at 0.008 sell side, there is a gap advantage of 0.001 for each option (arbitrage). In other words, the option price is below the intrinsic value. This signals that in this moment option traders act rationally.

    If a trader intends to buy the options at 0.008 in the hope to sell it back for profit before the expiry date, he or she must be very cautious because approaching the expiry date, there may be no liquidity. In addition, please bear in mind that the option trading may cease one week before the expiry date. However, I may be wrong.

    This is not an advice. Please do not follow my investment decision or strategy. Gain or loss is in your own hands.
 
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