hi all ,
i m a beginner to options still trying to understand its ways , so i learned that every option is made of intrinsic and time value , for a put option the value of intrinsic part is strike - current value , thats wat i read .
so on 6 sep 2012 , the september put option with 5500 strike is in the money.
now
06-Sep-2012 open260.70 high264.00 low221.95 close243.70
is its values and nifty closed at 5238.4 for tat day
so my strike - current would be 5500 - 5238.4 = 261.6 , this has to be its intrinsic value , so why is my option below the intrinsic value , shouldnt it be more than that , adding hope value as well??
where am i going wrong . kindly help
i m a beginner to options still trying to understand its ways , so i learned that every option is made of intrinsic and time value , for a put option the value of intrinsic part is strike - current value , thats wat i read .
so on 6 sep 2012 , the september put option with 5500 strike is in the money.
now
06-Sep-2012 open260.70 high264.00 low221.95 close243.70
is its values and nifty closed at 5238.4 for tat day
so my strike - current would be 5500 - 5238.4 = 261.6 , this has to be its intrinsic value , so why is my option below the intrinsic value , shouldnt it be more than that , adding hope value as well??
where am i going wrong . kindly help