cancel
Showing results for 
Search instead for 
Did you mean: 
nutlug
Veteran Contributor

July corn call price question

Why is a July $4.50 call priced at $0.5175 and a July $4.70 call priced at $0.39 when they should both have they are both in the money and should have the same amount of time value ?  A July $4.50 is twenty cents farther in the money so why is it not worth twenty cents more than a $4.70 ?

0 Kudos
2 Replies
c-x-1
Veteran Advisor

Re: July corn call price question

the option farther out of the money or not as far in the $ - always has more time value/price value.

 

the more -in the $- the strike is = less time value/price value.

0 Kudos
c-x-1
Veteran Advisor

Re: July corn call price question

let me explain an extreme scenario to make sense - no different than your subtle scenario, nutlug.

 

use CK for explain - closed $4.90 - so a $2.00 call = 4.90-2.00=$2.90, right?...no TIME premium b/c it's so far in the $$$.

 

take a $4.80 call = closed about 22 cents ---10 cents of in the $$$ premium and 12 cents of TIME.

 

hope this explains it better......no different than your CN 450 & 470 calls - 450 has deeper in the $$$ value, 470 expresses more time value.Deeper in the $ makes TIME IMMATERIAL, or less material with price.  

0 Kudos