STOCKOFF6

Calculation and Equation (STOCKOFF23)

B

S

T1

T2

Background of the Equation

① The liquidity of option prices can sometimes exceed the current value of the asset. The numerator (O1 - O2) is an indicator to objectively show this difference.

② When the market liquidity functions properly, the discounted value by market share should converge closely to the current asset value.

③ The denominator (0.95 × K - 1) serves as a barometer that measures this condition, leading to similar conclusions as liquidity positioning.

(O1 - O2) (0.95 × K - 1) = SX

K