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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: backman who wrote (9149)11/23/1998 1:19:00 PM
From: Douglas Webb  Respond to of 14162
 
The price went up, but so did the volatility. That accounts for the increase in the put price.
Doug.



To: backman who wrote (9149)11/23/1998 2:08:00 PM
From: the options strategist  Respond to of 14162
 
Backman, Herm can probably explain better than I but it has to do with volatility.

In the case of indexes it's called "volatility skewing" where demand for index puts is high and supply maybe low, thereby causing out of the money index puts to be expensive.

I don't buy options on the next day after expiration because they tend to be more expensive.

Your question was explained to me by a market maker but I can't articulate it intelligently.


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