why the diference is almost twice the price of the first one
2007-01-13 09:34:09 · 4 answers · asked by Anonymous in Business & Finance ➔ Investing
It's a common presentation. The deliverable or underlying is different in the two sets of options. This is because the company recently underwent a major reorganization - it merged/was acquired/spun a part of itself off or similar event fairly recently.
One set of non-standard options are the old options before the reorg action. These may include CIL, or cash-in-lieu. The other set, with markedly different prices, are standard options drawn upon 100 shares of the post-reorg stock.
To identify the deliverable, go to the options clearing corporation website, click "contracts" on righthand side of their home page:
http://www.888options.com
Caution: the non-standard option contracts will disappear over time. No new positions will be permitted in these options, the only trades will be longs/shorts closing their positions. These options will become illiquid. The B/As (bid/ask spreads) will increase.
2007-01-13 11:34:25 · answer #1 · answered by strath 3 · 0⤊ 0⤋
The answer is very simple both will have different market prices for present. That is if market price of LLEAK is 40 the market price of YSDAK may be only 25 making the price of the option twice that of the other.
2007-01-13 20:35:56 · answer #2 · answered by Mathew C 5 · 0⤊ 1⤋
Sometimes issues with similar the same call date and strike price trade at different prices when something else is included other than just the stock (common when warrants are involved).
2007-01-13 11:06:47 · answer #3 · answered by C 2 · 0⤊ 0⤋
The options are over different underlying assets.
2007-01-13 11:40:58 · answer #4 · answered by andrew f 3 · 0⤊ 0⤋