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Message: [QUOTE="HuskyHawk, post: 4733479, member: 1414"] That is simply "leverage". That's the most simplistic view of them as a leveraged proxy for the underlying stock. Stock drops and your call can be worth zero, which is why it carries greater risk than holding the shares. But that's not how professional traders look at them. There are millions of little micro adjustments in those option prices that don't always track the stock. The goal is to exploit those. Used to be people with calculators doing that math, but now I'm sure sophisticated programs do all of it. [/QUOTE]