ITM Options that are already profitable including the premium
Note: I am new to options and not very experienced.
There are generally no free meals in life, and in the stock market, if something is too good to be true, it is. I have researched this question before and found a similar question on this Stack Exchange: Free Money with Options? Many of the answers were really helpful, but all pointed towards one thing:
The ask for the option was more important than the Last Price or Bid.
I am just incredibly confused, because I have found many Put options on Yahoo Finance where the share price was well below the Strike Price, and the ask was absolutely tiny. Even more unbelievable was that these American Style options had an expiration date two or three months away.
Example: AAPL is currently trading at about 0, but according to Yahoo Finance, the ask price for its Jan 2021 0 put options is [CO].20:
Columns from left to right: Contract Name, Last Trade Date, Strike, Last Price, Bid, Ask, Change, % Change, Volume, Open Interest, Implied Volatility
If this is a stupid question, or if I have not been clear enough in the way I asked, please let me know.
It just seems highly improbable that these options are legitimate and very profitable.
(2)2 Comments
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You are looking at bad data. The data is outdated. AAPL is now trading at about 0 per share. AAPL had a four-for-one stock split back in August 2020 (source). Before the split, AAPL traded at more than 0 per share. This explains the (now incorrect) low price for the 0 strike put option.
You can find the correct options chain on CBOE's website:
You can also see the options chain on NASDAQ's website:
The ask for the option was more important than the Last Price or Bid.
One isn't more important than the other. Which one is relevant to you depends on whether you are buying or selling.
I am just incredibly confused, because I have found many Put options on Yahoo Finance where the share price was well below the Strike Price, and the ask was absolutely tiny.
There are several problems with your data. First, it's from August 28th when AAPL was a bit over 0 (before the 4:1 split).
More importantly, your data is worthless. Yahoo quotes are delayed and even worse, look at the time stamp for each of the 5 options displayed. It ranges from 1:09 PM to 3:56 PM so you are looking at the last trade for the option which occurred at various prices of AAPL during the day. IOW, the 400 put is 20 cents and the 5 put is .25 ??? It's BAD DATA.
If you want to compare the options, look at real time data.
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