What happened to the cereal thread from last night from Jeanne44? That was some of my best work on ET. The 9 month low was $59.60. You must have paid $2.60 for these with a 57 vol just before announcement with stock at $63 assuming Jan expiration? They disappointed last Q. You would have to think if they were going to do that again they would have come out with some mid-quarter guidance. Investors don't like back to back surprises in one direction. As we learned from the other RIMM guy that bot Jan 65 calls at $3.30 ($63 stock px), with the stock at $71 he got $7.50. $8 move on the stock netted him $4.20. The vols hence premium get knocked way down once the news is out. So if you were right and the stock sold off a whopping 10% to $57 from $63, with the vol dropping to 39 you would have gotten $4.25. I am not bashing you in hindsight, just put a crease in the brain about risk/reward. Risk $2.60 on the hope that they announce noone is going to use a pda anymore? The way option pro's make money is in shorting those to you and shorting stock. Noone really made money as it works out. The MM or whomever sold you these would have used a .34 delta then. Assuming the options are now about $.25 and he unwinds, he made $187,000 off of you and lost $185,000 short the stock with it at $70. Amazing how everyone thinks these are rigged like you said in your OP. These prices are calculated thru and thru using a fairly simple model. Next time you go to take a shot, be sure to use something like what I have included below and work out scenarios on paper with volatility assumptions before and after and then see what you think is the best 'gamble'. -T Bookmark this good Option Price Calculator