jimmynguyen
24 posts
msg #95006
- Ignore jimmynguyen
modified |
7/23/2010 12:26:26 AM
How come the stock price went up today, but the premiums for the calls decreased? Shouldn't it increase as the price moves closer to the call? Please help.
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alf44
2,025 posts
msg #95007
- Ignore alf44
modified |
7/23/2010 1:00:08 AM
... just so you know "jimmynguyen" ... I ain't buyin' the screenname !
You smell to me like an alias ... time will tell !
---
To your question ... dipshit !!!
An option's price is made up of 3 things...
1) Intrinsic Value
2) Time Value
3) Implied Volatility
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Since by your post it appears that you are apparently referring to an Out Of The Money Call Option ...
... there can be NO "Intrinsic Value" !!!
MOST of the value in an OTM Option is in it's "Time Value" !
Therefore, Time Decay (ie. the daily melting away of "Time Value") ... would account for the dwindling "premium" of an OTM Call ! ( and YES ... EVEN if the underlying security goes UP)
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DUH !!!
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jimmynguyen
24 posts
msg #95008
- Ignore jimmynguyen |
7/23/2010 1:16:46 AM
That was fast response. Thanks alfafa! I get it now. Options isn't for the weak. That optionplayer guy is sure tough. You're buddies with him? Got so many resources from him, but still ain't got a clue how to play options.
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drew9
171 posts
msg #95037
- Ignore drew9 |
7/23/2010 3:25:55 PM
Alf, it cannot be him as he actually used periods in his sentance!
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alf44
2,025 posts
msg #95048
- Ignore alf44
modified |
7/24/2010 12:23:02 AM
drew ... this "character" has NO posting history !!!
... of the 3 or 4 posts he/she has ... 2 or 3 of them came on THE DAY ... that "Mary / optionplayer / etc... etc..." ... UHHH ... "retired" !!!
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Pardon me if I'm a bit ... well ... "suspicious" !
Maybe I'm wrong ... MAYBE I'M NOT !!!
As I said ... time will tell !!!
---
BUT ... UHHH ... "jimmynguyen" ... indeed !!!
PAH - LEEEZE !!!
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jimmynguyen
24 posts
msg #95052
- Ignore jimmynguyen
modified |
7/24/2010 3:27:22 AM
Huh? You guys are weird. Sounds like you got some drama going on with someone else here. I'm complete newbie. I apologize if i asked such a dumb question making ya think i was fooling to be someone. Just trying to learn. Oh well, what a great way to make buddies.
Hey so you guys know anything about that optionplayer guy. Is there such thing as predicting the market with 100% accuracy (holy grail). Reading his stuff has made me crazy. I've tried the rsi2, but sometimes it could stay down there and trend keeps going lower. Bye. Thanks again.
by the way, jimmynguyen ain't my name. :)
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Kevin_in_GA
4,599 posts
msg #95053
- Ignore Kevin_in_GA |
7/24/2010 8:11:00 AM
I would suggest avoiding options for the most part - the potential upside is attractive, but the likelihood of losing ALL of your investment due to sudden price changes or through time decay is simply more downside than I am willing to risk.
Don't be afraid to put a few folks here on ignore if they act up - many of us put optionplayer333 and his other aliases on ignore WAAAY back. I recently removed that for him and (of course) regretted it almost immediately.
Welcome to the forums - feel free to ask questions at any level.
Kevin
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Garrett1410
15 posts
msg #95080
- Ignore Garrett1410 |
7/25/2010 10:06:39 AM
Also as the price went up, the volatility went down
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