# Why are these deep in-the-money FLEX options seemingly bought at a discount?

98% of the initial reference value is .98 x 267.88 dollars, which equals 262.52 dollars. However, the market value of each call contract they purchase is 247.42 dollars.

How are they purchasing these call options at a discount?

Here's the link to the prospectus (the reference value is on page 8, and the options price is on page 21): https://mplusfunds.com/defined-preservation-95-fund-fact-sheet-standard/prospectus-alaia-series-7-1-defined-preservation-95-fund-10-31-18/

$$OptionValue=Intrinsic Value+Time Value$$ $$OptionValue= (S-K)-Dividend$$ $$OptionValue=267x(1-0.02)-267x1.8\%x3=\\\247$$