SLAB251017P00085000 Option on Silicon Laboratories

An 'Out of The Money' option on Silicon has a strike price that Silicon Stock has yet to reach, meaning the option has no intrinsic value. 'Out of The Money' options are usually less costly than 'In The Money' options, making them more desirable to traders with smaller amounts of capital. Some of the uses for Silicon Laboratories' 'Out of The Money' options include buying the options if you expect a big move in Silicon Laboratories' stock. Since 'Out of The Money' options have a lower up-front cost (i.e., no intrinsic value) than 'In The Money' options, buying it is a reasonable choice.

Put options written on Silicon Laboratories grant holders of the option the right to sell a specified amount of Silicon Laboratories at a specified price within a specified time frame. The put buyer has a limited loss and, while not fully unlimited gains, as the price of Silicon Stock cannot fall below zero, the put buyer does gain as the price drops. So, purchasing a put option on Silicon Laboratories is like buying insurance aginst Silicon Laboratories' downside shift.

By selling Silicon Laboratories' put option, the investors signal their bearish sentiment. A short position in a put option written on Silicon Laboratories will generally make money when the underlying price is above the strike price. Therefore Silicon Laboratories' put payoff at expiration depends on where the Silicon Stock price is relative to the put option strike price. The breakeven price of 85.0 is the critical point that divides the payoff function into two parts. Below the breakeven price, the payoff is dropping and negative (the seller makes a loss). Above the breakeven price, the payoff line is upward sloping as the option payoff increases in proportion to Silicon Laboratories' price. Finally, at the strike price of 85.0, the payoff chart is constant and positive.

Silicon Laboratories' 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 Laboratories 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 Laboratories. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in nation. For information on how to trade Silicon Stock refer to our How to Trade Silicon Stock guide.You can also try the Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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 Laboratories. 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 Laboratories 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 Laboratories 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 Laboratories' value that differs from its market value or its book value, called intrinsic value, which is Silicon Laboratories' 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 Laboratories' market value can be influenced by many factors that don't directly affect Silicon Laboratories' 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 Laboratories' value and its price as these two are different measures arrived at by different means. Investors typically determine if Silicon Laboratories is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Silicon Laboratories' 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.