I bought 3 put options last night at 3.50$ for expiration next week 29th. I bought them at 50 cents iwth the bid price being at .37 cents. All yesterday this stock tanked and it opened up at 2.83 cents today. yet the bid price only moved up to 51 cents?? how is this possible?? please help me cuz this is starting to really confuse the hell out of me.
Your problem may be the delta of the puts you bought. What was the price of the underlying at the time you opened the position, and what was the strike price you selected? What was the stock/instrument underlying?
the time when i bought into this stock was 3.30$ at .50 cents wit bid at 37 cents. my stock is chk. My platform doesnt show delta. the volume, open interest, and implied volatility. Wow this is more confusing than i thought it would be. Does the intrinsic value go up on options has it gets closer to the expiration date?
Asking again: What was the price of chk at the time you opened the position, and what strike did you select? I don't see a pic. If your strike price was out-of-the-money, then you may have jumped into a low delta, in which case your put may not be tracking the underlying in the way you'd hoped. I assume that you were looking for a short term trade, in which case Delta is all-important. You need to study delta.
Was the 3.5 the strike or the price of the underlying when you bought the options? As per what you describe it's likely that the price of the put already had priced in the decline in the underlying.
yes i was out of the money im osrry. I think i purchased it at 3.77 or so. I choosed the strike of 3.50$ and now the current price of chk is at 2.87$ and yet my price of the option only moved by 9 cents. The stock dropped from 3.50 my strike price i chose to 2.87 and my options only moved by 9 cents,. So are you saying should always purchase in the money or at the money? i just assumed that if i purchased way above my 3.50 intended strike at 3.77. i figured that i would be getting more bang for my buck considering the odds are more stacked against me. I purchased the stock to expire on 29th. Maybe that is also a factor in why this isnt moving. Unfortunately my pltform doesnt show me a delta column.,
You can check delta on the following site: https://onlineint.optionsxpress.com/OXNetTools/Chains/index.aspx?SESSIONID= Yes, you should be looking for higher deltas to better track the underlying. But you also need to watch spreads, which suck for CHK. So, in this case, you got a low delta, big spreads, and low open interest and low volume. Your underlying moved, but your position didn't track. But we only learn by making mistakes, so this was a good use of tuition, eh?