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Increase in Nifty call option premium in negative mkt. |
chandrujimrc
Brown Belt
Joined: 21 Apr 2009
Posts: 1683
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Post: #1  Posted: Tue Aug 09, 2011 8:55 pm Post subject: Increase in Nifty call option premium in negative mkt. |
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Dear friends,
Even after the loss of 45 points,call options rate increased from prev close.How? any idea?
chandru |
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SwingTrader
Site Admin
Joined: 11 Aug 2006
Posts: 2903
Location: Hyderabad, India
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| Post: #2 Posted: Tue Aug 09, 2011 9:01 pm Post subject: Re: Increase in Nifty call option premium in negative mkt. |
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| chandrujimrc wrote: | Dear friends,
Even after the loss of 45 points,call options rate increased from prev close.How? any idea?
chandru |
This is almost certainly due to increase in volatility which is a major component of options pricing. Traders might be pricing in more volatility for the next few days (thus increased implied volatility of options).
_________________
Srikanth Kurdukar
@SwingTrader |
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chrome
Yellow Belt
Joined: 28 Dec 2009
Posts: 645
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| Post: #3 Posted: Tue Aug 09, 2011 9:22 pm Post subject: |
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| call writers are missing now due to increasing volatility and call buyers are more due to low risk high reward ratio in case of bounce back in markets.... |
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chandrujimrc
Brown Belt
Joined: 21 Apr 2009
Posts: 1683
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| Post: #4 Posted: Tue Aug 09, 2011 9:38 pm Post subject: Increase in Nifty call option premium in negative mkt. |
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Dear ST/Chrome,
Thanks a lot for your immediate reply.One more querry sir.Yesterday there was an increase of 24 lacs OI in 4700 put ,your vtew pl.
chandru. |
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