Options Trading Tutorial

what does it mean if options price + strike is less than stock price?

.GQRFG call option is trading for $29 with strike price $35. The underlying stock for that option (HAR) is trading for $64.30 today. Doesn't this mean the option writer is losing money by selling the contract (strike price + option price is $.30 less than the stock price)?

Public Comments

1. No, they are not losing money, they are just pricing it at what they are willing to sell. that option expires next week and the market has been in a downdraft which can open up spreads on options and simple arbitrage deals. Keep in mind that the option price reflects what folks think the price of the stock will be on a certain date and are willing to pay a premium or discount for it. Some people will sell at a discount if they need to close a position or are forced to close a position. Liquidity (or lack of) also impacts the price. I didn't check the options volume for Garmin, but you can click the link below: