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A stock split is when a company decides to exchange its stock for more (and sometimes fewer) shares of its own stock, with the price per share adjusting so that there is no change in the overall ...
An options chain offers easy-to-access data about a stock’s available options, providing traders a quick way to find relevant information. A chain is valuable because:
The company thinks that’s too pricey, so the board approves a 2-for-1 stock split. The company grants each shareholder an additional share for each share they already own.
Time value is, as above, the difference between option value and intrinsic value, i.e. Time Value = Option Value − Intrinsic Value. More specifically, TV reflects the probability that the option will gain in IV — become (more) profitable to exercise before it expires. [6] An important factor is the underlying instrument's volatility ...
The main effect of stock splits is an increase in the liquidity of a stock: [3] there are more buyers and sellers for 10 shares at $10 than 1 share at $100. Some companies avoid a stock split to obtain the opposite strategy: by refusing to split the stock and keeping the price high, they reduce trading volume.
By opening one store, the firm knows that the probability of high demand is 50%. The expected value today of the option of expanding next year is thus 50% * (10M - 8M) / (1 + 10%) = 0.91M. The value of opening one store this year is 7.5M - 8M = -0.5M. Thus the value of the real option to invest in one store, wait a year, and invest next year is ...
While it hasn't officially announced any intention to do so, with its current share price above $600, Meta looks like a prime candidate for a stock split, especially in light of the fact that so ...
A typical option strategy involves the purchase / selling of at least 2-3 different options (with different strikes and / or time to expiry), and the value of such portfolio may change in a very complex way. One very useful way to analyze and understand the behavior of a certain option strategy is by drawing its Profit graph.
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