How are YOU telling BP to go **** itself?

[KrazyHorse]

And it's not like brokers are charging huge fees nowadays. ATM transactions are almost as expensive.

[Al B. Sure!]

You're STILL at work? What the hell? Why'd you call me a jackass by the way?

I don't have any historical options data (doesn't the CBOE make you pay for that?), but for today...

BP closed at 29.68
Calls
JUL 29: 2.79
JUL 30: 2.09

Puts
JUL 29: 1.93
JUL 30: 2.34

[KrazyHorse]

a) No, I'm not at work. I went home at 8 like a regular person

b) I don't need to be at work to work. What sort of primitive company do you think I work for?

[Al B. Sure!]

And so Alpert's entire plan from the get go falls apart.

What?

[Al B. Sure!]

What is the point of a stock broker if you don't take advice from them?

Why do you need to hire one to trade if they just relay your mouse clicks?

HC, here's a quick lesson for you...

http://money.howstuffworks.com/personal-finance/financial-planning/stock2.htm

The exchange makes buying and selling easy. You don't have to actually travel to New York to visit the New York Stock Exchange -- you can call a stock broker who does business with the NYSE, and he or she will go to the NYSE on your behalf to buy or sell your stock. If the exchange did not exist, buying or selling stock would be a lot harder. You would have to place a classified ad in the newspaper, wait for a call and haggle on a price whenever you wanted to sell stock. With an exchange in place, you can buy and sell shares instantly.

[DaShi]

What?

So this wasn't a ploy to get GS market data from KH? You're on your own then.

[Al B. Sure!]

So this wasn't a ploy to get GS market data from KH? You're on your own then.

[KrazyHorse]

Dude, you have to tell me what the strikes are on those. They look near the money (call and puts close to equal) and puts < calls so let's assume that they're the 30 day 29$ options.

Furthermore, rfrs are pretty low right now, and furthermore rho is usually pretty low for anything reasonably short-dated, so let's assume they're 0. Also, since rfr = 0 American value is worthless, so let's price as Euro.

Since we're going for order-of-magnitude I can use my favourite options approximation mechanism and stick in normal distribution for lognormal. Under B-S assumptions, this gives:

call = 0.5(S-K) + 0.2(S+K)*sigma*sqrt(T)

I'm not going to do it, however, as your options data is inconsistent.

EDIT: it might be stale. Looks like the market's pricing a ~1$ dividend in overnight on July29/July30...but BP canceled dividend...

[Al B. Sure!]

?

I gave the strikes. 29 and 30 are the strike prices. I specifically gave you near the money calls/puts.

Calls
JUL 29: 2.79
JUL 30: 2.09

Puts
JUL 29: 1.93
JUL 30: 2.34

What did you think those numbers meant? Sorry for not making it clear, but what else could they mean?

[KrazyHorse]

Oh, you were quoting JUL K=29 not JUL 29



I was wondering where the hell you got offmarket quotes....

[KrazyHorse]

In that case, use JUL17 as the expiration, count trading days, insert that as T, K=29, S= whatever the close was, etc

[Al B. Sure!]

Oh, you were quoting JUL K=29 not JUL 29



I was wondering where the hell you got offmarket quotes....

Are there options that don't expire on the 3rd friday of the month?

[KrazyHorse]

Wonder if there's another cool approx with all those datapoints...

Let's see....you can construct a butterfly...does that make anything possible? Have to think...

[KrazyHorse]

Are there options that don't expire on the 3rd friday of the month?

Yes. But they are not particularly liquid

[KrazyHorse]

Basically used bespoke to hedge intramonth risks, as I understand it.

My guess (this is not based on any actual knowledge) is that the borkerage/IB/whatever will attempt to hedge as much as possible with the liquid options and eat the rest of the risk.