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Is it possible to scan for cheap options?

#1
Can any one help...
I once bought ACC CE @ very cheap price (around 0.20) and it gave good profit.

  • Is there any site where you can scan for the cheapest options. Or
  • are there any tell tale signs that indicate that particular option for a particular month will be cheap? For example, if the stock is in an uptrend, PE should become cheaper right?

I'm new to options, so any help would be much appreciated. Thank you.
 

travi

Well-Known Member
#2
Options don't have a pretty straight forward pricing mechanism like other instruments.

Technically, in current high arbitrage/HFT world, mispricing of options is virtually nonexistent and therefore all prices are deemed to be more or less very approximate to their fair value ignoring all illiquid options.

Coming to the pricing, options are only the premiums they command according to their Delta and Time to expiry. so technically any option can go from even 0.05p to inr. 500 but it has nothing to do with the option itself.
What you need to be "scanning" for is such huge moves in the underlying spot through "prediction" and take a position in it.
A recent example was PC Jewellers whose stock tanked 50 & intraday, so an OTM PE could have easily gone to 300X or more or if you held PE and BankNifty opened -800 points down etc.