Question: 1. Based on the option quote below, what does the market maker think the fair value is for the following option? IBM Feb 119 Call

 1. Based on the option quote below, what does the market

1. Based on the option quote below, what does the market maker think the fair value is for the following option? IBM Feb 119 Call 2.80 x 2.90 2. Based on the option quote below, if an order to sell the option were received, would the market maker buy or sell and at what price? GME Mar 65 Call 3.50 x 3.60 3. In the question above, in general terms what would the market maker do once they executed the option trade in order to hedge themselves? 1. Based on the option quote below, what does the market maker think the fair value is for the following option? IBM Feb 119 Call 2.80 x 2.90 2. Based on the option quote below, if an order to sell the option were received, would the market maker buy or sell and at what price? GME Mar 65 Call 3.50 x 3.60 3. In the question above, in general terms what would the market maker do once they executed the option trade in order to hedge themselves

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!