As a follow up of my own recommendation on playing MA for pre-earning, which option is there to choose from?
Choice A : $150 Nov07 Call - $11.30
Choice B : $155 Nov07 Call - $8.70
Lets analyse these 2 options closely.
$150 call has intrinsic value of $153.70 - 150 = 3.70
thus the time value = 11.30 - 3.70 = $7.60 for 21 days left before expiration.
$155 call has intrinsic value of $153.70 - 155 = -1.30
thus time value = $8.70 + 1.30 = $10 for 21 days left before expiration.
Thus how much we are actually paying for the option?
$155 call : $10
$150 call : $7.60
$150 call is cheaper. I will get this one. ^_^
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