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Abercrombie & Fitch Co. Message Board

  • agamemnus_0 agamemnus_0 Feb 19, 2013 3:19 PM Flag

    Option premiums.

    (BTW, new board is awful -- two lines visible in the message box??)

    Anyone buying weeklies for this week -- do yourself a favor and buy monthlies instead. The extra cost is worth it. The options market is pricing in basically 0 volatility after Friday's report.

    The weekly option premium for the first in-the-money put (at $52.00) is about $2.90 -- the price to buy is $3.10. For $50 calls it is $2.60. (the price to buy is $4.45)

    The March option premium is not much more expensive from the weeklies. That $50 call (March 16) is $4.45, and the $52.50 put is just $4.00 -- a premium of $3.34, or just 10% more than the expiring weeklies!

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