hey all.
Just want to go through Option MPOOA.
It has an exercise price of 10cps acording to this link http://markets.theage.com.au/apps/qt/quote.ac?code=mpooa§ion=summary&submit=Go!
Now the options have gone up over 100% today to close at 3.5cps.
The way I understand this is that you would need to pay an additional 10cps on top of your 3.5cps (option price) to end up with the same 10cps underlying share. Is this right or am I missing something?
It seems strange that the option price has risen so drastically when the are "out of the money?"
Are people just expecting that the share price is going to sky rocket soon? Or am I completely clueless to how options work?
Just want to go through Option MPOOA.
It has an exercise price of 10cps acording to this link http://markets.theage.com.au/apps/qt/quote.ac?code=mpooa§ion=summary&submit=Go!
Now the options have gone up over 100% today to close at 3.5cps.
The way I understand this is that you would need to pay an additional 10cps on top of your 3.5cps (option price) to end up with the same 10cps underlying share. Is this right or am I missing something?
It seems strange that the option price has risen so drastically when the are "out of the money?"
Are people just expecting that the share price is going to sky rocket soon? Or am I completely clueless to how options work?