May 12, 2014

NF 7000 call is priced at 295 levels

Options are extremely expensive and now the 7000 at-the-money call is priced at 295 with an implied volatility of 45.

Under normal steady state conditions assuming an IV of 15%, the fair value of a 7000 call is 110.

Once the elections results are out and the so called fear vanishes, chances are high that the IVs will drop and option prices will crash by min 50%.

Let's see... what happens.

Option calculator results:

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