Equity options with an illiquid underlying?

Question

Shouldn't the value of an in-the-money call options on an equity that is fairly illiquid sell at a premium?

My thinking went along the lines of being able to aquire an asset at a fixed price in a timely fashion without driving up the price of the underlying dramatically (which would happen in the case of acquiring it via the open market).

Answer 1

Yours look like an unlikely situation if you mean the options are real like options on stock.
Then it depends on where you bought the stock either in the money or out of money or at the money. Since you say the stock is illiquid it means there is no trading in the particular stock and the price is bound to remain wherever you bought the option either in, out or on the money. I don't know why a premium should be attached to an option where ever they are in, at or out of money if the stock is static.
Option price movements and stock price movements trace a 45 degree line maeaning they are linear. Of course you have a slight cost of carry above the 45 degree line making it slightly above linear. Beyond this cost of carry you cannot expect to have premium. Also it is difficult to think that there is heavy trading in such an option when the underlying stock is static because the brokerage and cost of carry will eat away the premium forming around the in the money state of the option. Ultimately close to expiry the options shell out the premiums formed. It is clearly shown by the option greek omega which traces a bell curve.
To think of an option to have gained to in the money status when the underlying stock is static is also difficult.
In the case of synthetic options like real estate options may be different.

Answer 2

terrific element is purely you opt for the businesses that are identifying to purchase and merchandising in a extreme volumes and watch that businesses perfomance in quarterly comments,what proportion orders they are having and that enterprise's funds pass and administration human beings and so on..,this might take 2 months to return to end after which you start up your identifying to purchase and merchandising .with out suitable know-how dont take possibility