![]() ![]() So here’s what’s puzzling you: If you buy a call option at a given strike price, how much might it be worth if the underlying stock reaches your price target at a specific point in time?įinding that answer isn’t easy, because options premiums have a lot of moving parts. And options premiums tend to decay, all else being equal, as the clock ticks toward expiration. Sometimes options premiums move incrementally, or bit by bit, while other times, they take off exponentially. You know that options prices (premiums) and their underlying stock prices don’t move in lockstep. But rather than buy the stock outright, you’re thinking about buying a longer-dated call option. You’ve got a price target in mind, and you think that target may be reached within a matter of weeks. Suppose you’re eyeing a stock that appears to be an attractive buy for an intermediate-term trade. ![]() ![]() Estimate your options premium at a given price and on a given date to help decide if the potential return on a trade is worth the risk.Learn how the theoretical price tool can help project options prices Understand the different factors that make call options prices move ![]()
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