4 ms·
$1000 is meaningful on its own but not for the reasons most of these comments think: it's an awkwardly large amount to pay for a single share, and an even more
by pslam 13y ago
$1000 is meaningful on its own but not for the reasons most of these comments think: it's an awkwardly large amount to pay for a single share, and an even more awkwardly large amount to pay for a standard option.
Standard options are contracts of 100 shares, so that's $100,000 covered by a single option, which at current prices are about $2,500 each. This puts it out of the realm of small time investors, which is why GOOG is one of the few options available as "mini": 10 share contracts. Even at mini it's damn expensive per option.
I wouldn't be surprised if they split the stock at some point soon.
- Frozenlock 13y agoIndeed. I wanted to buy 'in-the-money' options not so long ago. When I did the math, I just decided to let it go and check for a cheaper stock.
- pslam 13y agoEspecially if you wanted to do a simple covered-call, e.g: * Buy 100 GOOG at $1000. * Sell 1 Nov 16 $1050 Call. (Edit: Then assuming GOOG doesn't go down significantly it's a profit even if assigned) Normally that would be a relatively low risk position, but you'd need $100,000 in GOOG underlying to cover it, which is a rather large amount for small investors to throw around even with margin accounts. And that's just for ONE option. Edit: Oh, and if you thought $1000 is annoying to trade, check out Berkshire Hathaway: https://www.google.com/finance?q=NYSE:BRK.A https://www.google.com/finance?q=NYSE:BRK.A $175,400 per share.
- tanzam75 13y ago> Oh, and if you thought $1000 is annoying to trade, check out Berkshire Hathaway: If you want to trade Berkshire Hathaway, you're supposed to trade the B shares -- not the A shares. Berkshire A usually trades under a thousand shares per day. Even on a market-value basis, this is still much lower than the B shares.