FINDING MISPRICED OPTIONS
All our option-related discussions so far have been theoretical. Now it is time to delve into the practical to see how options work in the market. After finishing this chapter, you should understand
1. How to read an option chain pricing screen
2. Option-specific pricing features such as a wide bid-ask spread, volatility smile, bid and ask volatility, and limited liquidity/availability
3. What delta is and why it is important to intelligent option investors
4. How to compare what the option market implies about future stock prices to an intelligently determined range
In terms of where this chapter fits into our goal of becoming intelligent option investors, obviously, even if ...