Figuring Out When the Option’s Price Will Move

It can be difficult to judge the value of options price vis a vis the underlying stock price.  It’s frustrating watching the stock value climb to new heights and then watch your options price not even move an inch.   Of course the price of the option will be affected by the Greeks (Delta, Theta, etc.) and Implied Volatility, but if you aren't familiar with those concepts (which you should be at some point), here's a layman's way of figuring out price.

When watching the options prices, Look at the prior history of the stock’s price and the option price.  They move in sync with each other in increments. 

One example is AT&T…for some options values, each time the price of the stock moves a tenth of a point, the option price will move one point.  For instance:  When AT&T’s (symbol T) stock price is at $35.20 the August 18 call option strike price of $37 is valued at $0.12.  When AT&T’s stock price goes to $35.30 the option price will go to $0.13 and so on.

Another example is Walmart (symbol WMT):  When the stock price is at $68.10 the August 18 $70 call option is valued at $0.81.  When the price goes up to $68.20 the option is valued at $0.82.