oemOptions Posted October 14, 2020 Posted October 14, 2020 Please see attached images for details For Bearish Put Spread = Buy Put 124 + Sell Put 120, Math 1 from given values, referring to Premium.jpg Current price is 121.26 Intrinsic value = 2.74 Net extrinsic value = 4.525 - 3.96 = 0.565 for 17 days Math 2 from analyze chart, referring to Analyze.jpg Let assume price staying at 120 all the time For trade analysis, profit is 14.25 at 120 today but profit is 177.6 at 120 on expiration, 1.776 - 0.1425 = 1.6335, 2) 1.776 (expiration) - 0.1425 (17 days) = 1.6335 for Time decay Questions : 1) Which one is correct extrinsic value for time decay? 2) Why are premium different between 1.6335 and 0.565 as shown above? Does anyone have any suggestions? Thanks in advance Quote
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