When premium income is collected

Quote from MTE:

I really don't see what the problem is.

Japanese Yen futures contract is for 12,500,000 JPY.

1 point = $.000001 per Japanese yen = $12.50 per contract.

So an option trading at 0.00015 is $1,875.
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well there is definetly a problem. the question is can you solve the problem which i would appreciate.
i personally took the value of the option premium listed of 0.00015 and multiplied it by the point value of 12.50 which is what they all tell you to do. my calculator answered 0.001875. ( 0.00015 x 12.50 = 0.001875) how did you come up with 1,875? you must have dropped some of those zeros and decimals in the front when you did the calculation and that my friend is the problem with these option premium quotes.
the other point about what you are saying dosn't make sense at all to me. true that the minimum tick point value in the yen is 1. calculating a one point move in the yen would be worth twelve dollars and 50 cents. however tis option premium of "0.00015" whatever the number means will look like 15 points to me. if i multiply the point value of 12.50 times 15 points i get 187.50 not 1875 as you stated. so obviously there is a problem. the problem is when you came up with your answer of $1875 you dropped, added or deleted some decimals and zeros. if in fact you dont find this to be a problem please illustrate how you arrived at the $1875?
thank you for your time and your help.
 
Quote from triggertrader:

well there is definetly a problem. the question is can you solve the problem which i would appreciate.
i personally took the value of the option premium listed of 0.00015 and multiplied it by the point value of 12.50 which is what they all tell you to do. my calculator answered 0.001875. ( 0.00015 x 12.50 = 0.001875) how did you come up with 1,875?
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I'm guessing you're just jerking us around. I've now explained this 5 times. MTE has tried once. If you still do not understand, trading is not for you!!!

One last time.

In the Yen:
The tick value is $12.50
The tick size is .000001

It says so right here:
http://www.cme.com/trading/prd/contract_spec_JY2466.html

Your option premium is 150 ticks:
.00015 / .000001 = 150

150 ticks multiplied by the tick value is:
150 * $12.50 = $1,875
 
Quote from triggertrader:

well there is definetly a problem. the question is can you solve the problem which i would appreciate.
i personally took the value of the option premium listed of 0.00015 and multiplied it by the point value of 12.50 which is what they all tell you to do. my calculator answered 0.001875. ( 0.00015 x 12.50 = 0.001875) how did you come up with 1,875? you must have dropped some of those zeros and decimals in the front when you did the calculation and that my friend is the problem with these option premium quotes.
the other point about what you are saying dosn't make sense at all to me. true that the minimum tick point value in the yen is 1. calculating a one point move in the yen would be worth twelve dollars and 50 cents. however tis option premium of "0.00015" whatever the number means will look like 15 points to me. if i multiply the point value of 12.50 times 15 points i get 187.50 not 1875 as you stated. so obviously there is a problem. the problem is when you came up with your answer of $1875 you dropped, added or deleted some decimals and zeros. if in fact you dont find this to be a problem please illustrate how you arrived at the $1875?
thank you for your time and your help.
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Let me try one more time as well.

You can either use the ticks and then multiplying it by the tick value ($12.50) to calculate the value of a contract, or just take the outright quote, which is 0.00015 in this case and multiply it by 12,500,000, which is the contract size and you would get those $1,875.
 
Quote from MTE:

Let me try one more time as well.

You can either use the ticks and then multiplying it by the tick value ($12.50) to calculate the value of a contract, or just take the outright quote, which is 0.00015 in this case and multiply it by 12,500,000, which is the contract size and you would get those $1,875.
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ah, so there is another way to skin a cat. so would this work with coffee and silver futures?
for example i see a may 105 coffee put option selling for 0.11. the contact size is 37,500lbs. so would this option cost $4125?
and for a may comex silver 15.50 call option selling for 0.015 with a contract size of 5000 oz. would be worth only $75?
thanks.
 
Quote from triggertrader:

ah, so there is another way to skin a cat. so would this work with coffee and silver futures?
for example i see a may 105 coffee put option selling for 0.11. the contact size is 37,500lbs. so would this option cost $4125?
and for a may comex silver 15.50 call option selling for 0.015 with a contract size of 5000 oz. would be worth only $75?
thanks.
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Yes, yes and yes.:)
 
Quote from MTE:

Yes, yes and yes.:)
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Except, no. Coffee is quoted in cents/pound, therefore its multiplier is $375. And the 105 put is likely to be $2.02 given a reasonable IV. Therefore, your prremium will be $757.50.
 
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