Why the call option premium sometimes does not decrease the further out of money we go
Usually when you have an option change, the further OTM you go, the premium drops for the same expiry date.
But if we look at the Mar 2015 Call and Put option chains for VIXY, it seems this is not always true.
Calls are on left, puts on right.
How come the call for strike 27 is 1.45, which the strike 26 is 1.40?
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1.45 and 1.40 are the last trade prices. The last trade (1.45) for the 27 strike call must have occurred earlier than the last trade (1.40) for the 26 strike call. These options have low liquidity and don't trade very often. You have to look at the bid and ask prices to see what people are currently bidding and asking for those options. As you can see, the premium based on the bids and asks does decrease the further you go out of the money.
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