LEG Option Call 20-12-2024 5 Option on Leggett Platt

An 'In The Money' option is one with a strike price that the current stock price has already surpassed. Some options investors can hedge their Leggett Platt positions using in-the-money options. They may also want to buy options with some intrinsic value, not just time value. However, because in-the-money options on Leggett Stock have intrinsic value and are priced higher than out-of-the-money options in the same chain, their volatilities are relatively smaller.

Buying Leggett Platt's call option is the simplest of option trades. A call option on Leggett Stock gives investors the right (but not the obligation) to purchase Leggett Platt at the given strike price. Therefore Leggett Platt's call intrinsic value or payoff at expiration depends on where the Leggett Stock price is relative to the call option strike price. The strike price of 5.0 is the critical point that divides the payoff function into two parts. Below the strike, the payoff chart is constant and negative (the trade is a loss). Above the strike, the payoff line is upward sloping as the option payoff rises in proportion with Leggett Platt's price. Finally, at the break-even point of 5.0, the line crosses zero, and trading Leggett becomes profitable.

By selling Leggett Platt's call option, the investors signals his or her bearish sentiment. A short position in a call option written on Leggett Platt will generally make money when the underlying price goes down. Therefore Leggett Platt's call intrinsic value or payoff at expiration depends on where the Leggett Stock price is relative to the call option strike price. The strike price of 5.0 is the critical point that divides the payoff function into two parts. Below the strike, the payoff chart is constant and positive (the seller makes a profit). Above the strike, the payoff line is downward sloping as the option payoff drops in proportion to Leggett Platt's price. Finally, at the break-even point of 5.0, the line crosses zero, and trading Leggett becomes disadvantageous with no downside limits.

Leggett Platt's option chain is a display of a range of information that helps investors for ways to trade options on Leggett. In general, an option chain provides a helpful tool for investors to see all available option contracts, both puts, and calls, for Leggett. It also shows strike prices and maturity days for a Leggett Platt against a given expiration period. The table below combines all the option information in the form of a chain but before you use it, remember that it entails significant risk and it is not for everyone.

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Is Household Durables space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Leggett Platt. If investors know Leggett will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Leggett Platt listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.

The market value of Leggett Platt is measured differently than its book value, which is the value of Leggett that is recorded on the company's balance sheet. Investors also form their own opinion of Leggett Platt's value that differs from its market value or its book value, called intrinsic value, which is Leggett Platt's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Leggett Platt's market value can be influenced by many factors that don't directly affect Leggett Platt's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.

Please note, there is a significant difference between Leggett Platt's value and its price as these two are different measures arrived at by different means. Investors typically determine if Leggett Platt is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Leggett Platt's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.