1

Disclaimer: I'm a beginner in the options world, didn't do any trades yet, just researching.

Today I looked at call options prices for BMW. On HSBC site I found this call option with expiration date 16. June, strike price of 84 EUR, bid price of 1.01 EUR and ask price of 1.05 EUR. But the current market price of one share of BMW is 94.10 EUR. If I'm not wrong, call option thus has an intrinsic value of 94.10 - 84 = 10.10 EUR (plus it has some extrinsic value as well), yet ask is far below that.

How is it possible that this call option is so cheap?

BMW call option price

3

The option is only for one tenth of the exposure (Bezugsverhältnis 0,10 in the right upper corner).

So to get "1 share" you would need to buy 10 of them for 10,50€ which is matching fine with the premium of 0,46%

1

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.