Why are prices of ESTX50 ATM options so different ?

botpro said:
I think they are pricing it wrong. If it pays dividend then the Puts should be much cheaper than the Calls,
but they have it exactly the other way around... really funny...
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Sorry, but dividends increase the value of puts, because you can hedge with the basket of stocks and get the dividend, and have the effect of lower the call values for the same reason. I can sell the call vs a basket of stocks and get the dividend.
 
rmorse said:
Sorry, but dividends increase the value of puts, because you can hedge with the basket of stocks and get the dividend, and have the effect of lower the call values for the same reason. I can sell the call vs a basket of stocks and get the dividend.
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Hmm. then my options calculator has maybe a bug, I'll check. Thx for the info.

Update:
I have checked the case and my calculation is correct.
Can it be maybe that you are wrong in your above assumption? I mean are you sure?
 
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botpro said:
Hmm. then my options calculator has maybe a bug, I'll check. Thx for the info.

Update:
I have checked the case and my calculation is correct.
Can it be maybe that you are wrong in your above assumption? I mean are you sure?
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Not likely.
 
Further research shows that it is indeed the effect of dividends, yes dividends make puts more expensive.
When calculating one should not mix dividend with interest rate ;-)
 
botpro said:
What is your problem?
I just made my own calculation and detected that something indeed is fishy in this pricing as shown in the OPs screenshot.
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This:

botpro said:
Hmm. then my options calculator has maybe a bug, I'll check. Thx for the info.

Update:
I have checked the case and my calculation is correct.
Can it be maybe that you are wrong in your above assumption? I mean are you sure?
More...

You are assume that everyone else is wrong when you have no idea what you are talking about.

Anyway, the adult thing to do is put you on ignore from here. Good luck selling your system.
 
newwurldmn wrote:
You are assume that everyone else is wrong when you have no idea what you are talking about.
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No, that is just your own sick interpretation.

Anyway, the adult thing to do is put you on ignore from here. Good luck selling your system.
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And you landed in my Ignore list! Simply don't reply to my postings in the future.
 
SumZero said:
That also confuses me because these options are index options and not futures options.
http://www.eurexchange.com/exchange-en/products/idx/stx/blc/EURO-STOXX-50--Index-Options/19066

Because of that I don't see why they are not ATM
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My 2 cents:

Puts in stocks is basically always more expensive than calls. To serve for hedging purpose.

Other than the deltas, you need to check whether the same or similar pricing difference appearing in some other indexes options.

It sees a yes to me for just now. That could mean the major factor currently would be its IV, which decides its premium/price of options.

AFAIK, the market now tells you its directional bias that you might or might not feel agreeable/comfortable with this bias.
 
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This case is an interesting example.
I just wonder how to calculate from the given parameters in the screenshot (prices, strike, volatility, time, etc.)
the dividend% that is included (hidden) in the prices?
When I try to find it iteratively using BlackScholes I get a dividend% of about 2.65%, but I'm not sure if that can be correct.
Other values I got: 7%, 4.67%. Not sure which comes closest. For the Call side it fits, but not for the Put side.
Maybe an arbitrage opportunity here? ;-)
 
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