I bought Bank nifty puts on 13th.
With the next 2 days the premium shrunk to about 15%.
Now the index gone lower than Nov 13th levels.
But my puts still lesser than 50%.
Can anyone explain why this is happening even when we have 1 week left for expiry?
In short -
Puts - If u think the price will go down buy puts with strike price lower than current price. By expiry if the price does not go lower than ur strike price you will lose ur money.
Calls - If u think the price will go up buy calls with strike price higher than current price. By...