3 ms·
One thing to note is stock price dramatically impacts the price of options. For example 1 option contract for Amazon (over $3k share price) can easily be $4,00
by cj 6y ago
One thing to note is stock price dramatically impacts the price of options.
For example 1 option contract for Amazon (over $3k share price) can easily be $4,000. In comparison, you can buy 1 option for Apple ($400) contract for $200. After the stock split, option contracts will be 1/4 the current price.
Lower stock prices make the options market much more accessible to people investing less money (for better or worse).
- runako 6y agoEven more relevant for absolute dollar terms: standard options contracts are for 100 shares. So a single contract of AMZN can require $300k in cash to cover, depending on the brokerage.