Hi there,
I called up the spreadbettors (in particular IGindex) to see how they are calculating their options prices
I'm interested to see how fair they are, how they are pulling prices out
I imagine since at expiry since the delta is fixed at 0 or 1 they can't possibly cheat you out here, correct?
Since they are using a BS model, and as long as i can check my prices (in excel or something, grabbing the vols from the market prices) then if theres any disparity, they are obviously opening themselves up to arbitrage so they are forced to quote market prices
Before expiry however its much harder to calculate so i'm wondering whether they get up to any funny stuff or if anyone has ever had any experience with their options
I called up the spreadbettors (in particular IGindex) to see how they are calculating their options prices
I'm interested to see how fair they are, how they are pulling prices out
I imagine since at expiry since the delta is fixed at 0 or 1 they can't possibly cheat you out here, correct?
Since they are using a BS model, and as long as i can check my prices (in excel or something, grabbing the vols from the market prices) then if theres any disparity, they are obviously opening themselves up to arbitrage so they are forced to quote market prices
Before expiry however its much harder to calculate so i'm wondering whether they get up to any funny stuff or if anyone has ever had any experience with their options
