Interpreting options colour coded quotes and figures

[bigears]

Hi,

Pardon my ignorance as I’m new to this. I have attached a screen grab from ADVFN showing Liffe MAR 05 for BT.A. What does the colours Blue, Green and Red signifies?

I have also enclosed the Liffe version of this which does not have colour coding. What are Autoquote figures (AQ) used for ?

Thank you for your patience.

 

[Airthrey Capital]

Generally speaking screen quote colour codes usually mean the following..

Blue= higher
Red=lower
Green=unchanged

 

[Airthrey Capital]

Hi,


I have also enclosed the Liffe version of this which does not have colour coding. What are Autoquote figures (AQ) used for ?

Thank you for your patience.

Autoquote is a computer system which continuously calculates theoretical option prices using models developed jointly by Euronext.liffe and market participants. Euronext.liffe disseminates Autoquote prices for most LIFFE Market financial, equity and index option series. Autoquote prices are not firm but ensure model variables such as volatility are set correctly in order to keep model prices in line with LIFFE Connect prices

Autoquote will therefore give you theoretical prices, but in reality the true market prices will normally be well within the spreads quoted by Autoquote.

Basically you should not be trading at any price higher than then Autoquote offer or lower than the Autoquote bid.

 

[bigears]

Many thanks Airthrey for your reply. As to the colours (in the 'last' column), Is it at all possible that they are employed to distinguish buying a call from selling a call with a blue for a buy (long) and a red for a sell (short). Similarly for a put blue for a buy and red for a sell?
Other than this, how would one know if the last transaction was a buy or a sell?

Thanks again.

 

[Airthrey Capital]

Many thanks Airthrey for your reply. As to the colours (in the 'last' column), Is it at all possible that they are employed to distinguish buying a call from selling a call with a blue for a buy (long) and a red for a sell (short). Similarly for a put blue for a buy and red for a sell?
Other than this, how would one know if the last transaction was a buy or a sell?

Thanks again.

Every trade consists of a buyer and a seller.

If someone sells a put or call, someone else must be a buyer on the other side.

Each "Last trade" figure means that was the price that was struck. Somebody sold at that price, while somebody else bought at that price.

 

[bigears]

If someone sells a put or call, someone else must be a buyer on the other side.

Apologies if my questions are really basic.

Looking at the example LIFFE quote (attached), I highlighted the position of a person who bought the 80 calls at 1p for the MAR05 220, now where is the equivalent 80 sale shown?. Sorry but I am a bit confused.
Thanks again.

 

[Airthrey Capital]

The screen indicates that the last trade in the Mar 05 220 calls was struck at 1.

That means someone bought 80 at 1, and someone sold 80 at 1.

Take it to a simpler level.......

You want to sell your house. Th estate agent reckons it is worth between £100,000 and £110,000. (a fair, theoreticla value, just like the Autoquote figure)

Someone comes to see your house. He offers you £99,000. You think it is to low. No transaction / sale takes place.

Another person comes to see your house. He offers you £102,00. You still think this is too low. no transaction takes place.

Finally a third gentleman comes to see your house, he offers you £105,000. You decide that this is a reasonable price. You sell it for £105,000. The gentleman buys it for £105,000.

A single transaction has taken place at £105,000. (The transaction has involved 1 buyer at £105,000 and 1 seller at £105,000)

In other words, the last transaction /trade was at £105,000.

Both buyer and seller have agreed on a price (but ultimately, they disagree on value. The buyer believes he has purchased an asset which he thinks will increase. The seller believes he has sold an asset which will in future decrease)

Is that any clearer?

 

[bigears]

Yes Airthrey, this is clear now. Much appreciated. Regards.