Using Call Prices to Evaluate Stocks

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Is it just me, or are there some wild variances on call prices with similarly priced stocks? Meaning, say both stock A and stock B are currently $10/share. Stock A has a 1/15/20 $20 call priced at $0.15, and Stock B has a 1/15/20 $20 call priced at $1.10.

Now, I’m sure the sector of the stock plays a role in it- some industries have some real opportunity for growth coming out of this pandemic (travel, restaurants, etc)- but has anyone used this strategy to any degree, even if just a small degree? And if so, how did it work?

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Johnk812

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Posted: 4 years ago
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