Hi there. Keep in mind that options are valued based on their intrinsic value (ie head price - excercise price) plus time value (ie liklihood of the head price increasing before the excercise date). When head price is around the excercise price, the option value will consist of mainly time value. Note that when the head price was at 5c, BLKOA was around 1.5c even though it was well out of the money. As the head price increases beyond the excercise price, the time value of the option decreases, as the liklihood of the head price being above the excercise price becomes more certain. Time value will also decrease over time (seems obvious).
There are other factors such as liquidity discount and demand for leverage that affect option prices, but the above are the main two.
You are right that the time value of this option implies that there is an expectation that the head price will be greater than excercise price in the future. Just thought i'd add some more context to this.
For disclosure, my BLK exposure is entirely through options.
BLK Price at posting:
8.0¢ Sentiment: Buy Disclosure: Held
