Options have 2 components of value. One is the act
Post# of 573
Options have 2 components of value. One is the actual value of the call, for instance if you buy a 6 call it has about 1.80 of intrinsic value when the stock is trading at 7.80. The REST of the price of the call is the PREMIUM one pays to purchase the right to buy the stock. Of course out-of-the-money Feb calls are losing value. It has very little to do with the perceived value of the stock because there is NO intrinsic value in an out-of-the-money call like that. It has everything to do with the fact that the PREMIUM in front-month calls decays very rapidly. This is a call that is very far out of the money. The value was always in the TIME element (the premium being reflective of how much time before expiration) and there is now very little TIME VALUE left in it.
Of course, you already know that. I just posted it for those who aren't familiar with options.
And why look at the 17 calls when the stock is trading under 8? many were giving a target of 12-16, so a 17 call was always a huge gamble anyway.
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