I am confused can someone help

[Mr Steve]

I am new to TW2 so I hope I posted in the correct forum

Can anyone help me understand why my option call in an uptrend lost money?

Symbol, SKF
Purchased five contracts of a $110.00 call option
Purchase date 9/10/08
Purchase time 10:57:38 AM stock price was $118.16
Sold at 11:34:34 AM the same day stock went to about $120.00
So I was in the trade for approx. 36 minutes
On a one minute chart this took approx. 36 bars

My call option lost -$329.00
Can anyone please tell me how in the world did I loose money?
Calls go up and puts go down, so I thought.
I am very confused.
Thank You
Mr Steve

 

[jamescummins]

The most important factor for pricing options is the volatility. Any change in the volatility changes the options price. Prices can fall in the underlying, buy call options can still rise in value, and vice versa.
I would suggest hunting around here and reading all you can about options before trading them too much again as that is pretty fundamental without meaning to be rude.
Or, it is just bad fills, heavy comms. etc. But even so - read up on option pricing before trading them!!!!

 

[Rhody Trader]

Also keep in mind that you have the spread working against you. Options don't trade as actively as the underlying stocks. As such they have wider spreads. A fair amount of your loss could be accounted for by the fact that you bought at the offer(ask) and sold at the bid.

 

[A Dashing Blade]

Those options are trading on a vol of >90%
Actually, from 11.32 your time the stock was falling from the 120 area, at 11.34.30 it was ticking 118.70, 118.59 at 11.34.34!

 

[Mr Steve]

Thank you for your imput.
What would be a good volatility as an average. Are we looking at something of between 40 to 70, or undre 60 etc.?