diff --git a/lib/knockout.dragdrop.js b/lib/knockout.dragdrop.js
index 919c8be..c6ac4aa 100644
--- a/lib/knockout.dragdrop.js
+++ b/lib/knockout.dragdrop.js
@@ -178,19 +178,20 @@
         this.dirty = false;
     };
 
-    function DragElement(element) {
+    function DragElement(element, eventOffset) {
         this.element = element;
         toggleClass(this.element, 'drag-element', true);
         this.element.style.position = 'fixed';
         this.element.style.zIndex = 9998;
         this.element.addEventListener('selectstart', function () { return false; }, true);
+        this.eventOffset = eventOffset || { top: 0, left: 0 };
     }
 
     DragElement.prototype.updatePosition = function (event) {
-        this.element.style.top = (event.pageY - window.pageYOffset) + 'px';
-        this.element.style.left = (event.pageX - window.pageXOffset) + 'px';
-        this.element.style.top = (getEventCoord(event, 'pageY') - window.pageYOffset) + 'px';
-        this.element.style.left = (getEventCoord(event, 'pageX') - window.pageXOffset) + 'px';
+        this.element.style.top = (event.pageY - window.pageYOffset - this.eventOffset.top) + 'px';
+        this.element.style.left = (event.pageX - window.pageXOffset - this.eventOffset.left) + 'px';
+        this.element.style.top = (getEventCoord(event, 'pageY') - window.pageYOffset - this.eventOffset.top) + 'px';
+        this.element.style.left = (getEventCoord(event, 'pageX') - window.pageXOffset - this.eventOffset.left) + 'px';
     };
 
     DragElement.prototype.remove = function () {
@@ -535,7 +536,13 @@
 
                         var dragElement = null;
                         if (typeof options.element === 'undefined') {
-                            dragElement = new DragElement(createCloneProxyElement());
+                            var bodyRect = document.body.getBoundingClientRect();
+                            var elemRect = element.getBoundingClientRect();
+                            var eventOffset = {
+                                top: startEvent.pageY - elemRect.top + bodyRect.top,
+                                left: startEvent.pageX - elemRect.left + bodyRect.left,
+                            };
+                            dragElement = new DragElement(createCloneProxyElement(), eventOffset);
                         }
 
                         var overlay = document.createElement('div');