BMLOB have a strike of 1.5c and exercise of december 2016 if...

BMLOB have a strike of 1.5c and exercise of december 2016

if anyone knows how options work... the price is based on intrinsic value + other factors such as time and volatility (the more volatile the higher the value because upside is greater), and the further away in time the expiry is the greater the value (obviously..)

now with a strike of 1.5c and a price of 1.9c, the intrinsic value alone is equivalent to 3.4c BML

BML is now at 3.6c, so based on intrinsic value alone, options should be at 2.1c, now add the time value and the volatility value, these options should be at least 2.4c in my opinion

cheers