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I think the OP is pointing out that many people think of options as a bet on stock price movement with the probability of success being the probability of the s
by Pyramus 6y ago
I think the OP is pointing out that many people think of options as a bet on stock price movement with the probability of success being the probability of the stock moving.
When in fact volatility, time decay and many more factors are really shaping the success probabilities.
- nightski 6y agoAgreed all those factors go into the value and it's important to understand what you are purchasing. At the same time it is a leveraged position. If winds tilt in your favor you have the option for 100 shares of the underlying for only the cost of the premium.