Three years or so ago I was long a NTM Put option in KC (coffee) when the market spiked up 8 - 9 cents. Boom. The Put increased in value!!! I got out at a small profit as fast as I could make my fingers could dial the phone all the while not believing I was finally going to get away with one. Imagine that, a profit and a lesson. Usually my lessons cost dear. Peace and gtty, Lar
what's your problem? you're dropping this line over and over in this forum (check your own posts). people are here to ask and learn, not to be bullied by some toronto dick.
My humble contribution to this thread => Don't Bet Against Baidu.com Shares of the Chinese Internet juggernaut soared nearly 8% on Monday to close the day at $252.89 -- more than double the level where they started the year. But investors would be wise to hold on for more. The company seems on track to deliver a strong third quarter, which could send shares higher. Management continues to make shrewd moves, and if things continue to sour in the U.S. markets, investors could flock to Baidu as the perfect haven. Another possible boon for near-term investors: The National Day of the People's Republic of China, which takes place on Oct. 1. The day marks a weeklong holiday in China, and many citizens use the occasion to travel. Also, the strength of segments like travel- and education-related online advertising "are likely to contribute well to top line upside vs. guidance," RBC Capital Markets associate analyst Stephen Ju wrote Monday in a research note raising the company's price target to $333. http://www.thestreet.com/s/dont-bet...is/techstockupdate/10379998.html?puc=_htmlttt
You are now learning one of the great mysteries of options. The market goes up, and call premiums are flat. The price stays flat and the option premiums move up, then back down, and back up again. The price of options move independently of the market price, as mentioned above. Supply and demand, volatility. Time decay occuring in the afternoon prior to a three day weekend. Calendar spreads are a really interesting animal, because you have two options, different months, interacting with each other. You add an additional dimension ==> volty skews between the two months. And the skews move up and down as well. It can leave you breathless. "I love it", as Sherman said about war.
To elaborate a bit: The great majority of the time, Puts increase in value as the market declines and Calls increase in value as the market advances. That being said, there are about 5 different things which affect the value of options... options are not one dimensional... A large change in any of them or a combination of any of them can cause option values to do unexpected things. Sometimes, incredibly unexpected. fwiw Peace, lar
Look at something that trades with a huge volatility skew, for example the SPX. You'll find plenty of days when the index is up and the out of the money calls are down or days when the puts significantly out perform their delta.