Why do some call options fall even when the stock price rises (well before expiry)?

[Patel_6]

It’s around 11:50 AM and the option expiry is still far away, yet I notice something confusing: even when the underlying stock price goes up, some call options actually fall in price.

My first thought is that heavy call writing might be happening, which pushes premiums down. But that can’t be the only reason.

What are all the possible reasons a call option can lose value even when the stock price is rising, especially when expiry is not close?

I want to know if there are any other possible reasons that I am not able to think of.

[sanjayn]

IV is coming down. This company announced result few days back so it’s obvious that if there is no drastic changes in price IV goes down.

[niftymonk]

@sanjayn

IV is coming down. This company announced result few days back so it’s obvious that if there is no drastic changes in price IV goes down.

This is stock specific. Let me explain it in general

@Patel_6

It’s around 11:50 AM and the option expiry is still far away, yet I notice something confusing: even when the underlying stock price goes up, some call options actually fall in price.

My first thought is that heavy call writing might be happening, which pushes premiums down. But that can’t be the only reason.

What are all the possible reasons a call option can lose value even when the stock price is rising, especially when expiry is not close?

I want to know if there are any other possible reasons that I am not able to think of.

A call option can fall even when the stock goes up because the option price ≠ spot price.

Main reasons:

• Low liquidity → bad price discovery, wide spreads (Liquidity)
• Market thinks move is done → no further upside expected (Implied Volatility / Vega falls)
• Strike-specific selling → writers target that strike (IV crush at that strike)
• Time decay keeps eating premium (Theta)
• Stock move too small → option reacts weakly (Low Delta)
• OI shifts to other strikes → demand drops (Open Interest migration)
• Market makers managing risk → suppress prices (Inventory / Gamma control)
• Arbitrage correction → option was overpriced (Put-Call Parity)
• Fake LTP → last trade ≠ fair value (Microstructure noise)

Stock up shows what happened.
The option price shows what can still happen.

If future surprise reduces → call price falls.

[Patel_6]

@niftymonk Can you plz explain in brief what u mean by " • Market makers managing risk → suppress prices (Inventory / Gamma control)" and Strike-specific selling → writers target that strike (IV crush at that strike)( IV crush??)
.