Amarin Corp Plc (AMRN)

[BostonTrader]

STS, what you aren’t seeing is the 2nd part of how options are priced. You are citing the intrinsic value of the option, but you are missing the time value, which is the 2nd component. Take for example, I bought $16 calls at $3.75 with a March 15, 2019 expiration. The current price of those options is about $6.00. The intrinsic value portion is the 20% the stock is up over $16, however the overall option is up 60% because the other portion of 40% is the value assigned to the time value. Option will return much greater returns than straight stock purchases but can also be worthless, hence the risk and increased reward.