Premium price variation

Hi Everyone I’m freshers here. I hope i will Earn knowledge here by exchanging topics

My question about Premium Variation in Option Trading

On 08-May-2020 Just Dial Price was 340. Same time Premium was 7.7 for Just Dial May 400 CE . When i check today Stock has reached 349.85 But premium is 5.95. How it is possible?

I have’t checked the exact details of the stock, but there are 2 possible reasons.

  1. Theta decay( i.e. the closer you are to the expiry, the lower your chances of reaching strike price if OTM, hence the reduced price).
  2. Implied volatility

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