Day Trading Stocks & Futures

[against_tides]

what are you looking for? the option chain shows you what each option is traded at at any given point. so where is the confusion?

what are you looking for? the option chain shows you what each option is traded at at any given point. so where is the confusion?

I have seen ppl picking different ce or pe in same day...how do they decide which one to trade for

 

[against_tides]

It's simple!

1. Costliest would be the deep In The Money Options with the farthest expiry.
2. Cheapest would be the farthest OTM options with the nearest expiry.

I mean underlying absolute cost at any point of time

 

[Riskyman]

@against_tides You need to check Implied volatility to see if options are cheap or expensive.

Options will have their intrinsic value. But they are traded at prices determined by IV(time component).

 

[against_tides]

@against_tides You need to check Implied volatility to see if options are cheap or expensive.

isin't iv same for all options at a time?

 

[Riskyman]

isin't iv same for all options at a time?

Not at all. Implied volatility keep changing all the time. It changes minute to minute.
Lets say an option is trading at 15 rs. Lets assume that Rs 10 reflects the intrinsic value. The remaining 5 rs will reflect the premium for time value and volatility. IV represents expected volatility of a stock for a given period of time i.e lets say till expiry. IV will fluctuate due to demand/supply. more demand for an option means more the IV will tend to rise. Thats why you will see that in bear markets put options will be expensive. Alternatively, when demand for options decreases i.e expectation comes down then volatility reduces.

All of above in layman's words for easier understanding.

 

[against_tides]

anyone long in crude??

 

[Riskyman]

Hahaha, and what would that dance be called?

Never thought about it. Have a suggestion?

 

[afin]

@sanju005ind also lives in Pune. Same with @nitingosavi. I visit pune frequently.

And i have a standing invitation from @sanju005ind from a very long time now to meet with him at pune we met at Hyderabad on earlier occasions too so would be nice to meet a bigger bunch if it's possible for all of us.

 

[against_tides]

Sorry...I was not clear in my question.

I want to buy nifty call at current time(suppose 3pm)...
Is there any way to identify which call to pick from option chain list...

IV normally increase both side from ATM ...

 

[Riskyman]

And i have a standing invitation from @sanju005ind from a very long time now to meet with him at pune we met at Hyderabad on earlier occasions too so would be nice to meet a bigger bunch if it's possible for all of us.

@iwillwin is keen to visit pune. Maybe you guys can plan something and all traders from pune can meet you