No. of Recommendations: 2
Maybe somewhere knowing more about options than me amateur can explain what just totally baffled me.
Until a few minutes ago I had Jun'25 $50, Jun'25 $55 and Jan'26 $40 calls. While VZ stock was up 5% all those calls were up around $50% today, something so extreme I never experienced in my short options career. Why?
No. of Recommendations: 7
This is usually explained by one of two things.
In your case, I think it's just because options change in percentage value very rapidly (but not dollar value) when they are transitioning from out-of-the-money to in-the money. For example, your $40 calls were out of the money yesterday but are in the money today.
When that isn't the reason, as with deep in the money calls, it's often the way the price is being presented to you. Often a given option contract might only trade a couple of times per month. In that case what you see is the price change since the last trade, which might have been a LONG time ago.
When that happens, a better way to track it is to have a glance at the midpoint of bid and ask. This is generally what is used by brokers at end of day to give daily or monthly statements. Check the current midpoint versus your most recent statement value and you are likely to find the price change is logical given the change in price of the stock.
If not one of those two explanations, then sometimes something big has happened with the company and the options are going wild.
Jim
No. of Recommendations: 1
Jim so nicely and knowledgeable answered my question, as he always does for everybody, that finally the penny dropped: He is an AI chatbot.
