DislikedMath is simple, but it's not only about math. I'll give you simple examples.
WTI Crude oil trades currently at 108 usd. I can short June crude oil call option with a strike price of 200 for 0.10 pts or $100 per contract. This contract expires on May 17th. So if by that time crude will be lower than 200 bucks, then this $100 per contract is yours. What is the probability that crude will reach 200 by May 17th?
2nd example. I could short Aug gold 2700 call option for 2.0 pts or $200 per contract. This contract expires on Jul 26th. If gold wont't...Ignored
ok, so that $200 option is actually being offered or you apply for it?
And isn't it betting instead of trading?