Rise in price of stock but fall in price of Calls

Today i.e on 22nd January 2015, I’ve watched the price of Sun Pharm increasing more than 3%

Despite this 940,960 calls have decreased by nearly 50%. Can anyone tell me why it happened?

these are out of money call options and as you know expiry is approaching and time value is decreasing from the option thats why,even there is increase in sun pharma price, calls of 940,960 decreases.

Even I have observed this phenomenon several times.

its mainly because of time erosion as expiry is nearing.

During the start of the month time erosion is less, but towards the end it speeds up.

But sometimes you can see such phenomenon in ATM options too, which is attributed to the volatility drop of an expected event. Example if people knew Sun Pharma would increase today, they would have already rised the option price higher before the event, which would eventually drop in volatility when the event occurs.

On 22Jan2015, SUNPHARMA 940 CE has closed +6 up. 960CE & above strikes hv closed down negatively. The reason being, whn those strike price contracts came into existence in november, they were quoted with high closing prices. Till today they hv not traded at all after tht. According to the option model, the prices derived fr today are less comparitively, so they r traded actively at less price and showing negative close.