PUT and CALL options

[timepass]

Re: May.24 MAY-series Day.20 Nifty=5984 (17)

The Expiry zone has condensed to (5900~6100) from (5800~6100).

Today I noticed that 5900PE didn't break its LOD of 21 till the last 15 minutes, even when the NF made day highs. The decay in the closing minutes is understandable because of the nearness of the expiry and the weekend.

NF LTP was 5990 i.e. 10 pts away from 6000 and 90 pts away from 5900. 6000CE is priced at 41Rs. and 5900PE is priced at 20Rs. Does it mean that the puts are stronger at this point ?? More negative sentiment ??

 

[DanPickUp]

Re: May.24 MAY-series Day.20 Nifty=5984 (17)

Today I noticed that 5900PE didn't break its LOD of 21 till the last 15 minutes, even when the NF made day highs. The decay in the closing minutes is understandable because of the nearness of the expiry and the weekend.

NF LTP was 5990 i.e. 10 pts away from 6000 and 90 pts away from 5900. 6000CE is priced at 41Rs. and 5900PE is priced at 20Rs. Does it mean that the puts are stronger at this point ?? More negative sentiment ??

Hmm. What you talk about is a different of nearly one strike level. If we suppose that one strike level at this moment means 100% profit or loss, so nothing special about it.

What about a horizontal look and analyzes about that subject?

Take care and have a nice weekend / DanPickUp

 

[ashu1234]

Re: May.24 MAY-series Day.20 Nifty=5984 (17)

Today I noticed that 5900PE didn't break its LOD of 21 till the last 15 minutes, even when the NF made day highs. The decay in the closing minutes is understandable because of the nearness of the expiry and the weekend.

NF LTP was 5990 i.e. 10 pts away from 6000 and 90 pts away from 5900. 6000CE is priced at 41Rs. and 5900PE is priced at 20Rs. Does it mean that the puts are stronger at this point ?? More negative sentiment ??

Hi,
Its not like puts are stronger. If you understand option pricing the value you are getting for out of the money put which is 20 and almost at the money call 41 rs is all time value, if it would have been an expiry day both option will be trading at 0. What is happening at this moment is that volatility of Nifty is high, gamma of options is stable across the strike price which results in high time value of CE and PE.

 

[timepass]

Re: May.24 MAY-series Day.20 Nifty=5984 (17)

Hmm. What you talk about is a different of nearly one strike level. If we suppose that one strike level at this moment means 100% profit or loss, so nothing special about it.

What about a horizontal look and analyzes about that subject?

Take care and have a nice weekend / DanPickUp

Bouncer.. (meaning that it went over my head).

Couldn't understand it. Can you please elaborate ?

 

[DanPickUp]

Re: May.24 MAY-series Day.20 Nifty=5984 (17)

Bouncer.. (meaning that it went over my head).

Couldn't understand it. Can you please elaborate ?

Put 5900 is over priced and call 6100 is under priced. Vertical spread.

 

[ashu1234]

Re: May.24 MAY-series Day.20 Nifty=5984 (17)

Today I noticed that 5900PE didn't break its LOD of 21 till the last 15 minutes, even when the NF made day highs. The decay in the closing minutes is understandable because of the nearness of the expiry and the weekend.

Its because 5900 PE is having low delta of -.254 which means for every one point upside movement of put value decreases only by .25.

 

[DanPickUp]

Re: May.24 MAY-series Day.20 Nifty=5984 (17)

Its because 5900 PE is having low delta of -.254 which means for every one point upside movement of put value decreases only by .25.

@Ashu

You may read the post from TP again to see the point.

Take care / DanPickUp

 

[timepass]

Re: May.24 MAY-series Day.20 Nifty=5984 (17)

Its because 5900 PE is having low delta of -.254 which means for every one point upside movement of put value decreases only by .25.

Wouldn't that apply to increase in price too ??

Anyway, what is the delta of 6000CE ?

 

[DanPickUp]

One basic rule in option trading: Do not buy naked options on Fridays in case you do not absolutely need to do so.

If you use the option just for an intraday trade, that is not a problem and if you leg in to an existing strategy trade, that is also no problem.

 

[columbus]

Re: May.24 MAY-series Day.20 Nifty=5984 (17)

Today I noticed that 5900PE didn't break its LOD of 21 till the last 15 minutes, even when the NF made day highs. The decay in the closing minutes is understandable because of the nearness of the expiry and the weekend.

NF LTP was 5990 i.e. 10 pts away from 6000 and 90 pts away from 5900. 6000CE is priced at 41Rs. and 5900PE is priced at 20Rs. Does it mean that the puts are stronger at this point ?? More negative sentiment ??

Hi timepass,

Have a look at THETA of CALLs and PUTs.Calls are losing faster than Puts ,
meaning PUTS are stronger.This is as per theory. Theory may not work
always in markets.

Calls tend to have less Volatility in this series.By taking same value as PUTs
the actual price is 52Rs (Theta=-7.3).