On Jul 28 2020, u/OGdungeonmaster asked:
I have 10 $7.50c options for Euronav [[EURN:NYSE](https://finance.yahoo.com/quote/EURN?p=EURN&.tsrc=fin-srch)] that expire 11/20. They show they are worth $2.18 each yet the stock is at $9.72. Why would they be worth less than the strike price plus the option premium? This bc it is so low volume or because it is indicative that its going to go down?
u/NBKkevlar answered, with 11 upvotes to date
Probs cause of the low volume, looks like only 1 contract was traded today for that exp/strike. The bid/ask as of market close was 1.95/2.40. So technically people are only selling those contracts for 2.40. which means the contracts are trading slightly higher than strike price plus the option premium.
I’m pretty sure the 2.18 that they’re “worth” is what you would most likely get if you sold them using a market order
I don't understand why volume remains low, or how low volume answers the question. Why wouldn't an arbitrageur or market-maker swiftly enter, and buy the undervalued call?