Replies to post #35816 on NorthWest Biotherapeutics Inc (NWBO)

[TZOR]

I just went back to Yahoo's site, and sure enough it says the 1000 lot straddle was in the volume column today. Yahoo's site bite's, because I cross referenced the activity with my options brokerage account and it states the trade was initiated on 5/28/15. To provide additional details as to why someone would use the 15 strike versus the 10 strike could be, implied volatility, or they could prefer to initiate a delta negative straddle (if you know option greeks, then you understand what delta negative means), or someone doesn't know what they are doing (that happens with the big boys sometimes, they are human). You can tell that the trade was initiated because the open interest increased by 1000, and there was hardly any open interest prior to the trade. You do bring up and interesting point though, why would someone pay all the additional extrinsic value? To compare the $10 and $15 strike straddles, only the puts are in the money. To compare the intrinsic and extrinsic value of the two puts versus the stock at $9 you would find the $10 puts selling at $1.70 have $.70 of extrinsic value and $1 of intrinsic value. Whereas the $15 puts selling at $7.20 have $1.20 of extrinsic value and $8 of intrinsic value. Why would a deeper in the money option have more extrinsic value than an at the money or closer to the money option? That is a very good question, whomever bought the $15 puts over paid relatively speaking. The theory is the more an option is in the money (deeper in the money) the less possible it is for that option to expire out of the money/worthless, the less extrinsic value associated with the option. So how does a deeper in the money option have more extrinsic value than an at the money option? One can wonder