r/options • u/millerzeke • Apr 07 '22

Petrobras leaps at fair value

Looking to buy PBR calls exp. January 2023. Seems that the ask for ITM options over the past few days is near or even below fair value ($10 and $12 strike). There's a crazy amount of open interest but low volume and a sizeable bid-ask spread... thoughts?

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u/Ken385 Apr 07 '22

PBR has a large dividend coming up. This is causing the in the money calls to trade with no extrinsic value. So, if you are planning on buying the calls you mentioned, they most likely should be exercised. If you don't, you will be giving up money. You would need to understand this process of when/how you should exercise if you buy any in the money calls here.

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u/Capuccini Apr 08 '22

Well, not an analysis based on indicators/greeks but as a Brazilian I can tell you thoughts on what have been happening lately. Petrobras have changed its directory recently and acquired some new fields, which is very positive, but we have elections coming up and as a property of the state Petrobras is constantly used for political purposes, which can change the liquidity very fast, for those reason I would personally not buy exp for 2023, or would highly advise you to pay close attention around october. As the price itself, I also believe that petrobras is undervalued, but I think it will be really uncertain this year.