Does the actual price of a stock affect the price of the call options. For example if I can buy at the money call options on a $1000 stock for, say $10. If the stock moves 2% to $1020 Ive doubled my money. On the other hand a $10 stock with $1 atm call options, a 2% move will only get it to $10.02.... Nowhere near breakeven. What am I missing?
Very funny. I guess what im saying is If a $10 stock has a $1 atm call option. A $1000 stock should have a $100 atm call option, but this is not what i see.
Don't be unkind to the newbie. I was once and the chap left and never came back. OP, recalculate your examples, a bit more carefully this time.
Markets are efficient. No advantage to buying ATM calls on a $1000 stock vs. a $10 stock because calls on higher priced stock will be more expensive.
mostly efficient. there are some peculiarities to high priced stocks and options that all the pros here are aware of Im sure.
The reason I asked is some options guru says he buys $0 to $3 options, but not the more expensive options which I found odd because he considers them "more expensive".