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Strategies & Market Trends : The Covered Calls for Dummies Thread -- Ignore unavailable to you. Want to Upgrade?

To: Dan Duchardt who wrote (1377)	7/9/2001 10:34:34 PM
From: alanrs	Read Replies (1) \| Respond to of 5205

FWIW, according to QCharts (actually RavenQuote fed by QCharts) the current rate of loss of time value for the JUL45 is .14/day. This pretty much agrees with a projection by the Options ToolBox When I first started this I tried to enter values I found in the real world on the CBOE site and could not get option prices anywhere near the actuals, even maxing out all the parameters (some real prices were about 400% over the CBOE max). I figured I just didn't understand the site, or something, and put it in the back of my mind to revisit someday when I had the time. My question about the .14/day is that the option actually traded between 2.50 and 3.10, closing at 2.50. This was down .30. At the close the stock was up .50, so some of this price appreciation in the stock should be reflected in upward pressure on the option. My assumption was that the option had lost .30 plus whatever upward effect of the stock price, and that this was all time premium decay. Is there another factor that I'm missing that the options formulas consider, or is option pricing often out of line with theoretical values? Thanks ARS