I was looking to short some puts and came across the 7.2 premium for the June 35 put, which comes out to a 20% yield. The stock would have to close below 27.8 by June expiration in order for me to loose, what am I missing here??
Whats up with RF?
- Thread starter pandorasbox
- Start date
It could be a bum quote - I would say its the last trade, but no OI for that strike. Put in an order for 1 contract at $7.40 and see what happens! On IB, they do not list Jun 07 stikes, so I can't verify the price, other than looking at Schaeffers.
http://www.schaeffersresearch.com/streetools/options/option_montage.aspx
http://www.schaeffersresearch.com/streetools/options/option_montage.aspx
I don't see it on IB either. I use TS to scan for options and they show RF has a June expiry, but not IB, hmmm weird. Then again I only see 3 contracts as OI in TS so I don't know.
http://www.optionsclearing.com/market/infomemos/2006/nov/22317.pdf
The memo is a little old, but even so, the Jun 07's on the TOS platform state "79/100 (US $27.48)" .
The memo is a little old, but even so, the Jun 07's on the TOS platform state "79/100 (US $27.48)" .
It's an adjusted contract. From the numbers in thegazelle's link, that contract is worth about $2,767 (stock + cash) so if the Jun 35p is bid $7.20, it's trading under parity. IOWs, you'll be paying $2,780 for something currently worth less, ignoring commissions.
If it looks too good to be true, it usually is
If it looks too good to be true, it usually is