a birdie asked how to model a 1-day option

Friends,

It’s going to shock you to hear it, but I get emailed a lot of option questions. I’ve gotten some that are pages long with commentary, prices, blood type.

This is one of the reasons I put the shingle up for calls. I’m definitely not reading all that free, but also I can talk through options stuff way faster than I can read and write about it. You’ll say 500 words about what your doing and I’ll collapse it into floor trader grunts in the time it takes to pick up a handset and say “sold”.

I spent my whole adult life having to make option decisions in a few seconds. This is not anything special — talk with any market-maker and their fluency with calls and puts seems like a parlor trick. Options are just another language and being fluent in it means you think in that language natively. The old floor folk can even sign in options as fast as you can talk. (I can read the signing but I was the tail end of futures being traded in the pit and not on Globex. I never developed a large hand signal vocabulary).

That said, if a sub sends me a question that I can peck on my phone in a few minutes I’ll just answer it. (Also I read every email I get and try to respond to all of them even if it’s to acknowledge that both I and the sender are humans worthy of not being ignored.)

If responding to an email takes more than a few minutes I’ll pass it through the “would other people care about the answer to this question?” filter. If so, I can kill 2 birds with one stone. Oh my god, F me that’s a horrid idiom. The first person who ever said that should have been locked up on the spot cause that’s I-knew-he-was-a-serial-killer-when-he-was-nine level of clue. I never thought about the literal meaning of that expression until I typed it.

Re-phrasing — today is one of those moontowers where I can pick up the 7-10 split by sharing a response to a reader question that you might find useful.

Reader question:

Do you know of any way to model an option’s price intraday?