Why didnt this option move today?

Discussion in 'Options' started by yarray, Jun 10, 2008.

  1. yarray


    Question on the apple june 210 option

    The option had 10,297 volume today, and aapl closed at +4. It was up to +5 intraday.

    Can someone explain to me why the option kept retracing back to its lows as soon as appl atock started to sell off a little bit. The stock itself was in an uptrend all day.

    Does it just come down to people placing lower asks? or is it something else?

  2. cdowis


    Option prices are affected by price movement AND implied volatility.

    So, if the market moved and no change in price.... volty.

    Also the market can stand still, and the option price changes.... volty.
  3. 50_Bip


    Volatility and theta decay. Like the last poster said, stock goes higher, volatility drops, and option values decrease. Also, since there are only 10 days until june expiration, you effectively lost 10% of your option's value to theta decay.
  4. Tums


    you are running out of time...

    the decay is accelerating.
  5. Bingo!
  6. Where did you get that chart? and how can i see charts like that??
  7. allin



    Option pricing is calculated using the Black-Scholes method which takes into account several different factors including the current share price, strike price, implied volatility, days to expiration and risk free interest rate.

    That being said I put in all the variables for you into an excel sheet which will calculate the option price for you. You can use it other options if you want, it works pretty well.

    Hope this helps!