Chooser Option

  

The chooser option is for those who like to think over their investing decisions. Or you might call them "indecisive people" if you want to get mean about it. The chooser option gives the investor time to decide between a call and a put option at expiration. This option is ideal for securities that are expected to be volatile, but the investor isn’t sure which way that volatility will go.

Chooser is considered an exotic option because it isn’t a standard option on the American or European exchange. This option is similar to a saddle option in that a call and put are both purchased at the same strike, but only one at a time is exercised, so it’s a bit cheaper to buy than a saddle.

The chooser is more expensive than the standard option though, so you have to pay a little for indecision. Generally the expiration date won’t change regardless of what option is used.

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Finance: What is Intrinsic Value (of An ...6 Views

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Finance allah shmoop what is the intrinsic value of an

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option All right this is brandi She owns a twelve

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dollars strike price call option toe buy a share of

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my fifteen minutes are up dot com a retirement home

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chain for reality tv stars who recently gained self awareness

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Well the stock is trading for fifteen bucks a share

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of this moment Her strike price is twelve so the

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intrinsic value of that option is fifteen minutes twelve or

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three bucks that is it is three dollars in the

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money and if brandy converted it into a share this

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moment and then immediately sold the stock for fifteen dollars

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in cash well she'd make three bucks But there's a

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catch per call option doesn't expire for five weeks so

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that three dollars in the money is actually worth more

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than three dollars because she has data or time yet

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to exercise and convert or just sell the option itself

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So it's worth mohr because well a stock might go

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up from fifteen dollars in overtime Stocks go up so

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in the next five weeks well couldn't go up a

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dime twenty cents twenty five cents and make that three

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Dollars worth three ten three twenty three Twenty five Sure

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sure it could happen So yeah that's The difference between

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actual value and intrinsic value You get seita kickers in

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there making the option's worth more than just converting them

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into stock and selling them right there And yeah it

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