Fuchi,
I think that the 22 1/2 calls might be a good way for you to get your feet wet. Two things to keep in mind, though:
1. When you decide to trade, make sure you're looking at the "ASK" price. Too often, brokers report an average of the bid and ask price as "the price". On those 22 1/2 options you're talking about, my broker is showing a spread (the difference between the bid and asking prices) of 1/4, implying that the "price" you see quoted might very well be around 1/8 lower than the price you might have to pay. (1/8 = halfway through the 1/4 spread) You can usually find the ask price by looking for the "full" option price quotes on your broker's web page.
2. Even when you find the ask price, it may still not be the price you actually pay. I just printed out the prices on the 22 1/2 options you're talking about, and here's what I got:
"Price": 1 7/16 (just like you said)
Bid: 1 1/8
Ask: 1 3/8
Now, unless my ability to do simple math in my head is completely gone, the price they're quoting is completely outside the spread, so something's noty right there.
3. The difference in price between two options that are identical except on one variable can sometime let you infer whether the market agrees with you. Look at how "cheap" the Feb 25 calls are (around 3/4) AND at the relative volumes: ETRADE shows 99 "25" calls traded, 61 "22 1/2" traded. I'm NOT saying you should buy the 25s instead, just saying the relative prices and volumes may be one other thing to take into consideration.
Hope this helps.
Troy
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