Apple Options

D

DallasCowboysFan

Is there a brief explanation of how options are valued?
I bought an option for Apple, C 17 Sept.

They are suppose to unveil their new phones ( satellite capabilities, 5G, 1TB capacity, new camera, and don't forget new colors! ) and might announce plans for a new EV, Apple car on 14 Sept. I was going to buy them Tuesday night but decided to wait until Wednesday morning. I looked at the market and the option I wanted had increased in value by 60 percent , 1.5 - 2 hours after the market opened.

I bought the option and it closed down 40 percent at the end of the day.

Apple traded between 152 -155 + / - for the day. Options are volatile, but damn.

I recovered a bit today - Thursday. The contract was up 25% but I am still down 15%.

I still have 14 more days to recover, I think I will do well.
 
Yes there is a science behind it. Google options greeks for a start.
Write down what each greek does for ex. Gamma = velocity
Theta = time decay
Then learn the basics of options pricing and basic strats like verticals, straddles and such.
If you want to dive deeper lookout for Tony Salibas book managing expectations.
 
David's faith said:
Yes there is a science behind it. Google options greeks for a start.
Write down what each greek does for ex. Gamma = velocity
Theta = time decay
Then learn the basics of options pricing and basic strats like verticals, straddles and such.
If you want to dive deeper lookout for Tony Salibas book managing expectations.
More...


Thanks so much ill have a look at these too :)
 
David's faith said:
Yes there is a science behind it. Google options greeks for a start.
Write down what each greek does for ex. Gamma = velocity
Theta = time decay
Then learn the basics of options pricing and basic strats like verticals, straddles and such.
If you want to dive deeper lookout for Tony Salibas book managing expectations.
More...

to build upon David’s post, you need the option contract terms, the price you paid, the spot price at the time of the trade, the date and time of the trade and the price of the option now and the spot price now and the date and time now.

With these parameters and arguments you can determine the cause of the option price movement.
 
newwurldmn said:
to build upon David’s post, you need the option contract terms, the price you paid, the spot price at the time of the trade, the date and time of the trade and the price of the option now and the spot price now and the date and time now.

With these parameters and arguments you can determine the cause of the option price movement.
More...

I understand the fundamentals, at least I have read about them, but I have never applied the lesson to what I was doing.

I have always been winging it compared to the details others apply to options.
Basically, with the same logic I listed above.

I always thought Apple was a safe bet though. One of the new blue chips, with a beta of 1.2.

I'll have to read about option fundamentals again.
 
David's faith said:
Yes there is a science behind it. Google options greeks for a start.
Write down what each greek does for ex. Gamma = velocity
Theta = time decay
Then learn the basics of options pricing and basic strats like verticals, straddles and such.
If you want to dive deeper lookout for Tony Salibas book managing expectations.
More...

Thanks, I 'll check out Tony's book.

Straddles require more time than I want to invest in them.

Covered Calls are about as far as I want to go with options.
 
Y
newwurldmn said:
to build upon David’s post, you need the option contract terms, the price you paid, the spot price at the time of the trade, the date and time of the trade and the price of the option now and the spot price now and the date and time now.

With these parameters and arguments you can determine the cause of the option price movement.
More...
eah agree with this post entirely
 
You should take the time to learn exactly why the option increased or decreased in value. Follow an option or an option position (IC, spread, butterfly, etc) and at the end of everyday determine why the value changed or didn’t change. This will give you a better understanding of Greeks along with IV.
 
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