Hi Chait,
Since Options Is Comprised Of CALL & PUT, We Will Refer To Them As Options, Incase Specific Mention Is Not Required.
If You Are BUYING Any Option, Your Maximum Risk Is Limited To The Extent Of Premium Paid.
If You Short (Which Is Also Called 'Writing') Any Of Them Then The Risk Is Unlimited.
Value Of Options Are Two
a) Intrinsic Value
b) Time Value
Therefore As DTE (Days To Expiry) Of The Contract Reduces It Looses Value Theoretically Including Holidays.
Hence It Is Not Correct To Assume That Rise & Fall Of The Option Pricing Is Proportionate To The Market Move.
Happy & Safer Trading
SavantGarde
Since Options Is Comprised Of CALL & PUT, We Will Refer To Them As Options, Incase Specific Mention Is Not Required.
If You Are BUYING Any Option, Your Maximum Risk Is Limited To The Extent Of Premium Paid.
If You Short (Which Is Also Called 'Writing') Any Of Them Then The Risk Is Unlimited.
Value Of Options Are Two
a) Intrinsic Value
b) Time Value
Therefore As DTE (Days To Expiry) Of The Contract Reduces It Looses Value Theoretically Including Holidays.
Hence It Is Not Correct To Assume That Rise & Fall Of The Option Pricing Is Proportionate To The Market Move.
Happy & Safer Trading
SavantGarde
I have got your point.
Let me see what i understand now.... I have a NIfty Sep CALL 4700 @ 171 which is currently at 182.50. As this lot approaches the Expiry the value of this lot will decrease irrespective of what the market is behaving. ie even though if NIfty reaches say 4850 the lot price < 182????
Hope i got my question clear!!!!!
Also can i Buy the SEPT call for 4800 today????
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