1st thing is to put damnit on ignore...his/its comments are useless..pointless and rude..makes life easier not having to read that crap.
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AAPL Options are mispriced...
- Thread starter CaliforniaKid23
- Start date
1st thing is to put damnit on ignore...his/its comments are useless..pointless and rude..makes life easier not having to read that crap.
yip1997 - the theoretical value i was referring to was the value that my options calculator was showing me - which was much more than my purchased value. but, i had the wrong implied volatility, so i thought the options seemed mispriced/undervalued (typical beginner mistake).
thanx Rich - i will put dammit on ignore, i guess for some reason he wants to discourage people.
thanx Rich - i will put dammit on ignore, i guess for some reason he wants to discourage people.
Quote from a529612:
Where can you find historic IV data on specific stocks? Thanks!
The free site which is decent is www.ivolatility.com click on basic options. For free its not bad at all.
Quote from samuelg:
Did anyone notice that options for apple are undervalued, i own Nov 200 calls at 270 and they are almost half of their theoretical value.
or am i misunderstanding something here? or did the volatility just drop after earnings? (that seems unlikely)
Just a quick word on mispricing. Think about it this way. AAPL is traded on 6 different exchanges so there are a good number of market makers covering AAPL options. Do you think its likely that every one of those firms and all the thousands of firms who trade and send order flow to AAPL would all mispriced the options at the same time in the same amount?
As you discovered usually when you see something like that you've got a bad variable in your model.
Quote from samuelg:
Did anyone notice that options for apple are undervalued, i own Nov 200 calls at 270 and they are almost half of their theoretical value.
or am i misunderstanding something here? or did the volatility just drop after earnings? (that seems unlikely)
Itâs very likely. The news is out fewer buyers in the option so less demand. There is no real value if its out of the money right.
Read through this thread and others on IV in the options forum of this site. It's a good idea to know what impacts option's pricing before entering significant positions to them (either on long or short side).Quote from samuelg:
...or am i misunderstanding something here? or did the volatility just drop after earnings? (that seems unlikely)
R
thank you all very much. it was stupid of me to begin trading options without knowing the impact of implied volatility on options pricing. i will be reading natenberg's book and ofcourse the ET forums tonight, simply browsing thru the pages over the summer wasn't good enough.