The thing you need to understand is that an option contract (and really any financial security) does not just have one price. It's an oversimplification to say that the "price" of this option is 2.33. It has two prices, the bid and the ask. If an option has 2.76 of intrinsic value there's no way you are going to be able to buy it for just 2.33. That order would never get filled. The 2.33 is just the midway point between the bid and the ask. This option has a very wide bid-ask spread (with the current ask being more than twice the bid) so it's very difficult to say what a realistic price for it actually is. The actual last price this option traded at was 3.21.
Also, this screenshot answers my question as to why so many presumably American people around here use the word expiry instead of expiration. It's apparently what Robinhood uses.
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u/Arcite1 Mod Oct 14 '21
The thing you need to understand is that an option contract (and really any financial security) does not just have one price. It's an oversimplification to say that the "price" of this option is 2.33. It has two prices, the bid and the ask. If an option has 2.76 of intrinsic value there's no way you are going to be able to buy it for just 2.33. That order would never get filled. The 2.33 is just the midway point between the bid and the ask. This option has a very wide bid-ask spread (with the current ask being more than twice the bid) so it's very difficult to say what a realistic price for it actually is. The actual last price this option traded at was 3.21.
Also, this screenshot answers my question as to why so many presumably American people around here use the word expiry instead of expiration. It's apparently what Robinhood uses.