Ok, so I bought this FTSE100 5800 March 18th put from my broker
I was curious as to how much each ft100 point below 5800 the warrant will be worth at expiry
I purchased 4,000 at 22pence each
I called Societe General and the chap explained this
Value at expiry = (Strike-FTSE100 future value)/1000
My put is worth £1500 today
If the ftse remains at 5600 (now value), my option at expiry will be worth
(5800-5600)/1000=£800
For my put to be worth more than what I can trade it at today, the FTSE would have to be at 5450
Now, I fail to understand how this type of product can be of any value, I am lucky the markets are melting, but this is rather unusual, I put nearly £1k on the table for this, I did my research but I came up with a divide by 100 figure, got that wrong obviously! lol
So, is there any reason why I should let this expire, or why I should sell it now whilst ITM because as it it, I don't think think I'm priced in to keep this.
What's your thoughts.
Cheers.
I was curious as to how much each ft100 point below 5800 the warrant will be worth at expiry
I purchased 4,000 at 22pence each
I called Societe General and the chap explained this
Value at expiry = (Strike-FTSE100 future value)/1000
My put is worth £1500 today
If the ftse remains at 5600 (now value), my option at expiry will be worth
(5800-5600)/1000=£800
For my put to be worth more than what I can trade it at today, the FTSE would have to be at 5450
Now, I fail to understand how this type of product can be of any value, I am lucky the markets are melting, but this is rather unusual, I put nearly £1k on the table for this, I did my research but I came up with a divide by 100 figure, got that wrong obviously! lol
So, is there any reason why I should let this expire, or why I should sell it now whilst ITM because as it it, I don't think think I'm priced in to keep this.
What's your thoughts.
Cheers.
What do I do with this lousy warrant
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