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I see that only specific range of strike prices are traded for a given expiration date of stock options.
Who determines the min and max of that range? Is it the market makers?
If a stock is traded at $5 and the strike price range for a given expiration date is $1-$10 for a call option, can I somehow place a bid for $15 strike price?
If so, how do I do that? (I am using Trader Workstation and it only allows me to place orders for the range displayed)
I see that only specific range of strike prices are traded for a given expiration date of stock options.
Who determines the min and max of that range? Is it the market makers?
If a stock is traded at $5 and the strike price range for a given expiration date is $1-$10 for a call option, can I somehow place a bid for $15 strike price?
If so, how do I do that? (I am using Trader Workstation and it only allows me to place orders for the range displayed)
You'd have to contact your broker, new strikes can be setup but typically would have to fall inline with the others. For instance they wouldn't setup a 11.375 strike
There may also be no or limited interest in the 15 strike you have created
You'd have to contact your broker, new strikes can be setup but typically would have to fall inline with the others. For instance they wouldn't setup a 11.375 strike
There may also be no or limited interest in the 15 strike you have created
Thank you.
I understand that at that strike price it would probably have to be in a multiple of a dollar.
Is this something a broker would only do in exceptional cases or is this something they do readily all the time?
Options prices are usually determined by application of the "Black Scholes Equation."
The question is about strike prices not the price of the option
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