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Ruth S. Alexander wrote:
>
> Question for options pros: I am looking at the current issue of
> Barron's (Nov.10 issue). The options listings for TelBrasl for the
> Dec 115 put is showing a closing price of $14. This is confusing
> because it shows that the TelBrasl stock closed at $97 1/8. Is this
> pricing way off, or am I missing something? The difference between the
> strike price and stock is $17 7/8, while the option only costs $14.
> Looks like that means I could buy these puts and sell TelBrasl stock and
> make an easy 3 7/8 before commissions. Have seen these seeming
> discrepancies before and they are very puzzling. Thanks in advance for
> your responses.
Dr Oex will probably help you on this, but there are many reasons it
could be off (other than a misprint). There are many things to watch
for (after hours trading, dividend dates, takeover rumors, liquidity of
the option, among many). The bottom line is don't expect that you will
be able to trade this away from value. It won't happen. Nothing says
you can buy or sell settlements, they are just supposed to be a
representation of where the last trade was or where value is if no
trades (and that ain't always true, as you can see).
Eric
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