rsgo arbitrage opportunity, page-5

re: rsgo arbitrage/ longdong You don't understand options too well! These are effectively partly paid shares. Could be considered deep ITM options (in-the-money). With just a few months to expiry and option strike price 40% below PPS there is little time premium (certainly not 19% as we had yesterday). With these specific options you will get maybe 1c premium, or none at all, and get cent for cent gains with options vs shares. Purely intrinsic value at these levels, with little prospect of expiring worthless. Now, if the option strike price was 40% above the share price you'd have an entirely different scenario, with only time value and no intrinsic value. Time value decays as share price reaches and exceeds exercise price.