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  1. #1
    Junior Member ProteinJunky's Avatar

    What exactly sets the purchase prices? !!!

    Time and time again, you see prices favoring one direction over the other with a purchase price that is more than the opposing direction, sometimes significantly.

    My question is what exactly set these prices?


    Are these prices set by the broker themselves to try to trick people into going the wrong direction? or are they what the general populace is trading at that particular time?

    There have been multiple instances when the more expensive direction has fallen out of the money or never even went into the money as well as completely contradicted what the stock charts and indicators say as well, of course there are expectations to this, but it seems to happen more often then not that the more expensive direction was the wrong one to go with.

    I have attached a few pictures showing times when the more expensive option direction proved to be the wrong way to go, i am just curious what exactly attributes to these prices being set.


    Click image for larger version. 

Name:	higher price point 1.jpg 
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ID:	5586Click image for larger version. 

Name:	weird price point 2.jpg 
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ID:	5583Click image for larger version. 

Name:	weird price point 3.jpg 
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ID:	5584Click image for larger version. 

Name:	Wierd price point one.jpg 
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ID:	5585
    Last edited by ProteinJunky; 09-29-2016 at 04:38 PM.

  2. #2
    Legendry Member milos's Avatar
    Can you please upload image in higher resolution? I couldn't see clear details.

    Thanks

    Milos

  3. #3
    Legendry Member Michael Hodges's Avatar
    are you asking how the brokers set entry prices? they use an aggregate of data feeds from a number of sources to determine what a price range at a certain time is and then use that to calculate and odds/risk scenario for themselves that provides a "price they are willing to sell options at" which is the price level you get when you enter the trade.

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