it is important to understand that options are derivative securities.
The value of an option will not move in step with the underlying stock
because there are several factors that effect its price. Directional
movement of the underlying security is only one of those factors.
Option values are also effected by other factors such as the time left
until expiration, interest rates, dividends, but the most significant
factor effecting their value is implied volatility. If this is starting
to sound a bit complex...well, it is.
My suggestion is that you stop trading options for the time being and
spend some time learning about how these instruments work.
Christopher Smith
TheOptionClub.
--- In OptionClub@yahoogro
>
> I have been trading calls for 60 days. I never traded options before.
I was just a stock investor.
>
> I need some understanding for why the calls do not move in step with
the stock price exactly? I always buy barely out of the money with a 3
month duration. Most of my selections have a high beta.
>
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