I get this question a lot in DMs so putting it here so I can refer to it later. "Why do put options and call options at the same strike have different implied volatilities (attaches screenshot of broker GUI)?"
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another issue is that typically deep options are quoted wide, and, when i used to play, low (meaning expected sellers). so if you use the mid of a deep option to calc implied, it can give wacky results -- esp for american options. if i'm calc'g implieds, i ignore itm options
Yeah, what I mean is that the extrinsic would be different and if you converted naively using BS you would get a different implied (obviously still no arb available)
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yes. well, using the wrong model would be a bad start to things, i agree :) NO ARB FOR YOU!
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also, the nice thing about trading american or european options is that, at times, you can use those specific properties in your favor sometimes the best trades require you to look through standard measure of value to discover the specific/custom measure of value to your purpose
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