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Re: boredhousewife post# 4818

Wednesday, 12/01/2010 4:07:27 PM

Wednesday, December 01, 2010 4:07:27 PM

Post# of 20624
in conjunction to your post :

...Compare that with the January at-the-money Ford straddle. The 16-strike straddle is currently priced at $1.80 with the stock trading at $15.90. That’s 11.3% of spot price, with implied volatility currently at 37%.

In other words, the options market (which is really just the traders and market makers in control of it) think GM is likely to move in an 8.9% range (in either direction) between now and January expiration in 52 days. Ford, on the other hand, has the imagined potential to swing 11.3% during the same time frame. This translates to a range in GM from $31.17 to $37.27 and a range in Ford from $14.10 to $17.70.




http://www.optionshouse.com/blog/general-motors-nysegm-options-start-trading-231/

jmho, johnny

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