Doubt on option straddle...

Dear Friends...

I'm trying to learn the basics of Option and currently doing some paper trades. As an exercise, I bought the following on 05th July 2016, when Nifty was hovering around 8350

8350CE 28Jul2016 Long: 130
8350PE 28Jul2016 Long: 114.75

Nifty today i.e. on 8th July is at 8323 and the current prices are as follows

8350CE 28Jul2016 Long: 101
8350PE 28Jul2016 Long: 109.05

Although, Nifty has breached 8350, why the value of 8350PE is fairing so less when compared to 8350CE?

Please help and advise...

Hi ebutu555.

Nifty has moved in DOWN direction (from 8350 to 8323) since your purchase.
Hence PUTs gained comparatively over CALLs. But still it did not cross your
purchase rate.It is due to TIME DECAY of options.Had nifty has fallen badly
today ,then you PE rate of 114.75 would have been crossed COMFORTABLY.

apart from what columbus said....

if expecting an event with price fluctuation of over > 500 point in nifty or 850/1000 point in bnf then one should go for purchase of straddle or strangle .......

works wonders if range is over 1000 in nf and over 2000 in bnf....

else

one should sell straddle....if instrument slowly moves or stays within a range or moves wildly but comes at a price of purchase --- one can earn in all...(sellers...only for skill full traders ...who can adjust the trade in adverse situation or can improve prf or minimize loss)


----- 50 series in nifty is less liquid...not good for buyers...


hope this helps

YES, never go for xx50 strikes.Only in case of emergency go for it.

50 series is good for selling though