Nifty Futures Trading

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kkseal

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#802
#802
Re: Time to Stick my Neck Out ,Nifty 7300

Asish(aca), in your experience, option prices have a greater correlation to what - the cash (spot) price or the Futures price?
(w.r.t. Indian stk mkt & not the theoretical but from a practical viewpoint)

Regards,
Kalyan.
 
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aca_trader

Active Member
#803
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Re: Time to Stick my Neck Out ,Nifty 7300

kkseal said:
Asish(aca), in your experience, option prices have a greater correlation to what - the cash (spot) price or the Futures price?
(w.r.t. Indian stk mkt & not the theoretical but from a practical viewpoint)

Regards,
Kalyan.
Click to expand...
Futures.

Basically, In India the derivatives instruments are mostly used for leveraged trading and have very small life. Hence, they are more a measure of sentiments than a measure of risk-aversion. You will find option prices as well as futures premium rising and falling in tendem. Sometimes, I have found in NIFTY that on numerous occasions option premiums start rising first followed by future premiums and finally underlying will start moving.

Regards,
--Ashish
 
K

kkseal

Well-Known Member
#807
#807
Re: Time to Stick my Neck Out ,Nifty 7300

aca_trader said:
Futures.

Basically, In India the derivatives instruments are mostly used for leveraged trading and have very small life. Hence, they are more a measure of sentiments than a measure of risk-aversion. You will find option prices as well as futures premium rising and falling in tendem. Sometimes, I have found in NIFTY that on numerous occasions option premiums start rising first followed by future premiums and finally underlying will start moving.

Regards,
--Ashish
Click to expand...
... & vice versa. This is what i've noticed too. Was wondering if due to hedging that goes on in Index, but same in the case of stocks as well.

Thanks for the confirmation.

Regards,
Kalyan.
 
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