I'm trying to figure out the best time to buy a call option.
Is there any way to predict what an option will do.
For example if silver is at 12.82 with three months to expiration I buy a call $4 away from the money how much will this option increase if the price of silver increase by $3.
Or how much will the price of an option increase if silver jumps $1.50 in one week.
I'm trying to figure how options will move in different scenarios. Is there any way to get an idea of what will happen.
The delta of the option tells you exactly this. But also realize volatility changes, and time decay can offset these changes as well.
ie, a $17 option for silver might have a delta of 30 3 months out. So a $1.50 move in silver would change the option's value by $.45. Also realize delta changes as it gets closer to the money; that is what gamma tells.