Hi,
I am new to options trading. I have the following query:
1. How to calculate the "Implied volatility"?
We have to input Risk free interest rate and histroical volatility, I guess. What is the current risk free interest rate in india? Where to find such data? Is HV same as annualised volatility? How to cal. HV?
2. When u say deep in the money call option, does that mean we can buy
at the last strike price quoted by the option? For ex., Jphydro is currently trading at Rs.70. I am bullish on it. The last deep ITM option is at the strike price of Rs. 30 @ rs.8.8/-. But I dont' see any buy or sell price or quantity on the order book of the nse website. Does that mean the stock is illiquid and cannot be traded?? If yes,then what is the ideal deep ITM call option?
3. How do u define liquidity in options? Does that mean If I buy a call option
and to sell it, there must be someone in the opposite end to purchase it from me or can I exercise it anyway?
3. Can NIFTY option can be exercised before expiry? Does square off and
exercise of an option have same meaning?
4.Suppose today I buy a call option of JPHYDRO with the srtike price Rs.70@ at Rs. 2.65 (A-T-M) as 25 oct 2007 as its expiry. On 24th JPHYDRO is quoting at 75. If I exercise it, my profit would be (75-70-2.65=2.35*6250 = Rs.14687/-) Is it right? or will it depend upon the premium that will be quoted on that day?
Plz do reply
Regards
I am new to options trading. I have the following query:
1. How to calculate the "Implied volatility"?
We have to input Risk free interest rate and histroical volatility, I guess. What is the current risk free interest rate in india? Where to find such data? Is HV same as annualised volatility? How to cal. HV?
2. When u say deep in the money call option, does that mean we can buy
at the last strike price quoted by the option? For ex., Jphydro is currently trading at Rs.70. I am bullish on it. The last deep ITM option is at the strike price of Rs. 30 @ rs.8.8/-. But I dont' see any buy or sell price or quantity on the order book of the nse website. Does that mean the stock is illiquid and cannot be traded?? If yes,then what is the ideal deep ITM call option?
3. How do u define liquidity in options? Does that mean If I buy a call option
and to sell it, there must be someone in the opposite end to purchase it from me or can I exercise it anyway?
3. Can NIFTY option can be exercised before expiry? Does square off and
exercise of an option have same meaning?
4.Suppose today I buy a call option of JPHYDRO with the srtike price Rs.70@ at Rs. 2.65 (A-T-M) as 25 oct 2007 as its expiry. On 24th JPHYDRO is quoting at 75. If I exercise it, my profit would be (75-70-2.65=2.35*6250 = Rs.14687/-) Is it right? or will it depend upon the premium that will be quoted on that day?
Plz do reply
Regards
