SIMO Option Call 20-12-2024 40 Option on Silicon Motion Technology

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 Silicon Motion 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 Silicon Stock have intrinsic value and are priced higher than out-of-the-money options in the same chain, their volatilities are relatively smaller.

Buying Silicon Motion's call option is the simplest of option trades. A call option on Silicon Stock gives investors the right (but not the obligation) to purchase Silicon Motion at the given strike price. Therefore Silicon Motion's call intrinsic value or payoff at expiration depends on where the Silicon Stock price is relative to the call option strike price. The strike price of 40.0 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 Silicon Motion's price. Finally, at the break-even point of 40.0, the line crosses zero, and trading Silicon becomes profitable.

By selling Silicon Motion's call option, the investors signals his or her bearish sentiment. A short position in a call option written on Silicon Motion will generally make money when the underlying price goes down. Therefore Silicon Motion's call intrinsic value or payoff at expiration depends on where the Silicon Stock price is relative to the call option strike price. The strike price of 40.0 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 Silicon Motion's price. Finally, at the break-even point of 40.0, the line crosses zero, and trading Silicon becomes disadvantageous with no downside limits.

Silicon Motion's option chain is a display of a range of information that helps investors for ways to trade options on Silicon. In general, an option chain provides a helpful tool for investors to see all available option contracts, both puts, and calls, for Silicon. It also shows strike prices and maturity days for a Silicon Motion 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.

Check out World Market Map to better understand how to build diversified portfolios, which includes a position in Silicon Motion Technology. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in population. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

Is Semiconductors & Semiconductor Equipment 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 Silicon Motion. If investors know Silicon 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 Silicon Motion 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 Silicon Motion Technology is measured differently than its book value, which is the value of Silicon that is recorded on the company's balance sheet. Investors also form their own opinion of Silicon Motion's value that differs from its market value or its book value, called intrinsic value, which is Silicon Motion'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 Silicon Motion's market value can be influenced by many factors that don't directly affect Silicon Motion'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 Silicon Motion's value and its price as these two are different measures arrived at by different means. Investors typically determine if Silicon Motion is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Silicon Motion'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.