For call options, why can a lower strike price be more expensive than a higher strike price?

**AlbertRict** · 05-09-2016,

Hi...kind of new to options trading, so sorry if this is a dumb question.

My understanding is that a call option becomes more expensive the closer the strike price is to the current price.

For example, for a $100 stock, the price of a $101 option would be more expensive than a $105 option since the stock is more likely to be in the money at expiration.

But for some option chains, I'm seeing the reverse: an option with a higher strike price being MORE expensive than one with a lower strike price.

Why would this be?

Alfredwous · 05-11-2016,

Welcome

You might see some of that out of the money for a minute or two, especially on non-liquid options...but it's probably what your seeing just prior to an adjustment...you would never get a fill that would work that to your advantage. I would have to see one that you are talking about...any examples?

Alfredbum · 05-12-2016,

I guess one would need to know where you are looking at the price. If you are looking at the "Last Price" on the chain, and the 105 is more expensive then the 101, then what you are seeing is options that have not traded in awhile and the underlying has gone up in value since the 101(s) where traded.

**allenbv18** · 05-13-2016,

As you see in this example the 170s price has increased by $50.00 since the last time someone purchased those options.

Thread: For call options, why can a lower strike price be more expensive than a higher strike price?

Thread Tools

Display

For call options, why can a lower strike price be more expensive than a higher strike price?

Posting Permissions