covered call price drop

Discussion in 'Options' started by noob_trad3r, Sep 4, 2009.

  1. I sold a bunch of covered calls and I noticed interestingly enough the price is still the same as yesterday even though the stock is up.

    Is this because of implied volatility dropping?
  2. The simple answer is yes... unless it went ex-div this AM

  3. if the IV is dropping you should make even more money-not just delta,but also vega.
    either IV is up,either you sold the calls at market and there was a big difference between bid/ask.
  4. I see now. I did check the IV dropped 1.8%

    When call IV drops does that mean options traders are getting bearish on the stock?

    Also today is a 3 day weekend when calculating the price do I put in the 3 days off?

    I wrote the calls at the middle price of the bid ask
  5. MTE


    the OP said that the stock went UP not down!
  6. MTE


    Long weekend does impact the pricing as the market makers adjust their quotes to reflect the long weekend decay, which essentially manifests itself in a drop in IV.

    A drop in IV does NOT mean that traders are getting bearish, it means that there's less demand for options. However, in this particular case this is more likely to be the long weekend adjustment rather than the actual change in demand.
  7. something's not right-you should have made good money today-you have a long delta and stock is up,you have short vega and the IV is down,on the top of it you opened the position yesterday and before long weekend now you should have made some money even from time decay....
  8. MTE


    Yeah, the part that is not right is that you failed to read the post thoroughly. The OP asked about the call, just the call, not the total position.
  9. .
    #10     Sep 4, 2009