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ZombieSecurityAgent

11/11/12 6:50 PM

#15713 RE: Coz Mabluda #15712

For options? I will assume yes. The bid and ask can be influenced by demand if their is a lot of trading, but, mostly it is determined by implied volatility + time + the stocks price. As an example at 4:30 on option expiration day the implied volatility will be very low because the time decay has pretty much completely set in. So, if you have that Fridays expiry 30 minutes before close its value will be how far in the money you are. Example. The stock is trading at 19:25 an you own 19:50 puts that are about to expire the option will be .25 in the money , therefore it will probably be about .26 on the bid. If you have 19 puts it probably won't be worth but a penny or too. You should really go to the following link and go through the little educational course they have before you trade options bro. I am only touching the surface here.

http://www.cboe.com/learncenter/default.aspx