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Investing Strategies / Options - You Make the Call


Subject:  Re: I still don't fully understand time value Date:  3/27/2015  11:50 AM
Author:  davidbjonas Number:  11038 of 11360

You are correct, call price movements typically correlate to movements of the underlying share price. Stocks will very low option liquidity & wide bid / ask spreads, like MHR, may appear to behave differently. I say 'appear' because, in the example you cite in your post, you probably would not have been able to sell the call for .6 (which I assume was the bid / ask midpoint?)

Generally speaking, yes, time value decreases as option expiration nears.
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