I'm spending some time learning options and I have a scenario question. I'm attempting to have this make sense in my head but this just doesn't seem right or maybe I'm missing something.
I see this put option here:
Last trade date: 2019-08-19 12:09AM EDT Strike 70.00 Price 13.50 Bid 23.10 Ask 23.60 Change 0.00
This is a very old ITM put option. The last sale of the underlying stock is $45.50. The price listed for the option is well below the bid/ask range. If this price is correct, it looks like I could buy this option for $1350.00 and immediately exercise it(not hold it) for:
(70-45.5)*100 = $2450.00
Subracting the $1350 originally paid for the option and marginal fees, I would make a profit of about $1000. Is my math correct here?
I'm aware that in addition to the paying the $1350 for purchasing the option, I would also need to put up the $4550.00 to buy the stock for exercising the option, but am I missing something? It looks like, theoretically, I could buy this option and immediately exercise it for an immediate profit of $1000. Am I correct about this? Just sounds a little too good to be true.