OK, well, answer me this, please. The Nasdaq 100, QQQ, was 118 3/8, a couple of minutes ago. And October 110s (QQQ VT-A) were selling for 2 5/8. I know that options are sold in lots of 100, so if I bought one contract, or whatever they're called, that would cost me $262.50, right? I seem to remember that buying 100 is really foolish when you're buying options.
But what is open interest? The CBOE says open interest for that option is 107, does that mean that there are 107 lots of 100s for sale? And if I bought one, then there'd be 106?
And if the Nasdaq 100 went down to 110, what would I get and how would I collect it? I am assuming I'd get $837.50, less my $262.50, but from whom?
Somehow, I don't feel embarrassed asking you these questions. |
