CALL 11500 on Dow Jones index

A

arturo3

Hi everyone. I let my calls 11500 on dow jonex index to expire this friday. Which one is the figure I have to use to calculate the reimbursement I'll get (if any).
Thanks for your consideration.

Arturo
 
Arturo,

The Dow (cash) closed Friday at 11560.

Subtract your strike (11500) from the index (11560), then subtract the premium you originally paid: 11500-11560=60 less your permium.

I'm assuming your option is on the future, and its value at expiry will have converged with cash at expiry.

Seriously, unless your incredibly wealthy, don't you think it a good idea to learn the absolute basics of options before trading hard-earned cash?

Grant.
 
Quote from Grant:

Arturo,

The Dow (cash) closed Friday at 11560.

Subtract your strike (11500) from the index (11560), then subtract the premium you originally paid: 11500-11560=60 less your permium.

I'm assuming your option is on the future, and its value at expiry will have converged with cash at expiry.

Seriously, unless your incredibly wealthy, don't you think it a good idea to learn the absolute basics of options before trading hard-earned cash?

Grant.
More...

Hello, Grant. Thanks for your reply. I know the basics, but I wasn't sure which one is the price that should have been used, i.e., opening, closure, etc., for calculating the reimbursement.

Thanks anyhow for your concerns.

Arturo
 
Arturo,

Actually, now you come to mention it, I am also in the dark, here regarding determination of the specific value by which profit or loss will be determined.

Different exchanges have different methods - price at future expiry time, average price over a specific time period, eg, last half-hour of trading, some kind of closing rotation, etc ("etc" meaning I can't think of any others).

I'm only to happy to help if I can. And a little humility is not a bad thing, either.

Grant.
 
Quote from Grant:

Arturo,

Actually, now you come to mention it, I am also in the dark, here regarding determination of the specific value by which profit or loss will be determined.

Different exchanges have different methods - price at future expiry time, average price over a specific time period, eg, last half-hour of trading, some kind of closing rotation, etc ("etc" meaning I can't think of any others).

I'm only to happy to help if I can. And a little humility is not a bad thing, either.

Grant.
More...

Thanks, Grant, for the answer and for your intellectual honesty.

I am referring to the CBOE exchange. I am told that this figure should be displayed somewhere on their web site, but I haven't been able to find it. Do you know if this figure is called "settlement value"?

Thanks again for your help.

Arturo
 
Quote from MTE:

You can find CBOE index options specs here.

By the way, if you're talking about DJX then DJS is the ticker for settlement value and you can find it here: CBOE index settlement values
More...

Thanks for the links. I followed them through and I found the following info at http://www.cboe.com/micro/djx/questions.aspx#premiums :



Are DJX options European or American-style?
....STUFF DELETED.....
The expiration date is the Saturday following the third Friday of the expiration month. The settlement value is calculated based on the *opening* prices of the component securities in the index on the business day prior to expiration.
....STUFF DELETED.....



So, apparently I have to consider the opening price. However, when I look at the September settlement values on their site at http://search.cboe.com/cgi-bin/MsmG... VALUED VALUELESS VALUESAS settlement values I have the following figures:



September 2006 SETTLEMENT VALUES
S&P 100 (OEX): 609.01
S&P 500 (SET): 1323.12
VIX Options (VRO):

Dow Jones (DJS): 116.02
Russell 2000 (RLS): 732.45
Nasdaq 100 (NDS): 1641.08


The Dow Jones figure, 116.02, doesn't make any sense. But also the Nasdaq 100 and the S&P 500 figures, respectively 1641.08 and 1323.12, are not the Friday opening values, which have been 1,637.27 and 1317,48.

I got a little bit confused....

Thanks in advance for the help.

Arturo
 
The opening value is not the settlement value. The settlement value will be late, because all the components must print something first. The opening value is just given without waiting for all components. So they're different. Usually in the morning/ noon, the settlement value will come out. But it won't be the same with the opening value.
 
Quote from Li Ka Shing:

The opening value is not the settlement value. The settlement value will be late, because all the components must print something first. The opening value is just given without waiting for all components. So they're different. Usually in the morning/ noon, the settlement value will come out. But it won't be the same with the opening value.
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I see. But how come that the settlement value for the Dow Jones Index is completely off-scale respect to, say, the Nasdad100 and SP500 figures? (see my previous post)

Thanks in advance.

Arturo
 
Quote from arturo3:

I see. But how come that the settlement value for the Dow Jones Index is completely off-scale respect to, say, the Nasdad100 and SP500 figures? (see my previous post)

Thanks in advance.

Arturo
More...

DJX options are here

DJX is 1/100th of the Dow Jones Industrial Average so it's not off-scale.

Which options/underlying exactly do you have?
 
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