- Joined
- 7/22/13
- Messages
- 43
- Points
- 18
Hello everyone,
I have a question which may seem trivial to you.
Which is the difference between the fair price and the interval of prices observed in markets (bid-ask)?
What I mean is when someone wants to price a derivative and finds its fair price, e.g. European call, how he uses this price in order to sell the derivative. As far as I know, fair price and price observed do not coincide, am I correct?
I am looking forward to your replies.
Thank you.
I have a question which may seem trivial to you.
Which is the difference between the fair price and the interval of prices observed in markets (bid-ask)?
What I mean is when someone wants to price a derivative and finds its fair price, e.g. European call, how he uses this price in order to sell the derivative. As far as I know, fair price and price observed do not coincide, am I correct?
I am looking forward to your replies.
Thank you.