Day Trading Stocks & Futures

[Romeo1998]

100 % extension ke baad 161 % direct ek hajar points dur che so once below 100 %, then it can direct 1000 points felling

 

[dpksingh571]

What happened to Nifty CE,Not moving at all even after Nifty Recovery.

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[mohan.sic]

yes i also completely agree, expecially on expiry days, sometimes price is theoretically impossible.... for example... if bnf is at 30500, so 30000CE intrinsic value is 500 + timevalue + implied volatility .... so its price has to be more than 500, but many times it is value at 450 , 430 n sometimes even less than 400.... how is that even possible

hi romeo, actually that wont happen, price dont come below intrinsic value. In deep ITM especially when we the expiry day is near, we may not have any Time value, but the price wont be below Intrinsic value.

I think you are seeing the difference because, in above example when you said BF 30500 I guess you are looking at spot numbers. Opting pricing will be on Future prices ( except for expiry day). When you take Future prices in calculation, no option price will be below its intrinsic value. Even if it happens due to heavy orders, prices will correct in few seconds.

Or It could be one more reason why you saw the prices are less than Intrinsic value - Many times Deep ITM options are not very liquid. Trades dont happen often. The bid- ask prices will change as market moves but trades wont happen. So lets say the last trade in that contract happened 15 mts back and in this 15 mts, BN moves up by 50 points. Now usually when you study, you will compare the BF price with LTP on the option contract. But what happened is, the LTP belongs to Time stamp when BF was 50 points less than the current value. So we may assume that the option price is less than the intrinsic value.

Please account the above 2 factors, and check if you still find such deviations from Intrinsic value.

thanks.

edit: There is one more reason for such deviation from Intrinsic value. But this reason applies only on Expiry day, last 30 mts.
Close price/ Settlement price of spot will be avg of last xx minutes. Now lets say if price, moves up by 100 points in last mts in BF and current Bn level is 30500. Now the Intrinsic value in 30400 CE is 100 and in theory 30400 ce should not trade below 100.
But you may see the price trading at 85 which is 15 points less then its intrinsic value.
Why this happens, is because, since the BF close will be average price is last 30 mts, and the price moved up by 100 points in last 30 mts, the close price will obviously come down. So the day close/ settlement price of spot will be less than current level 30500.
Hence market will consider this factor, and price the 30400 ce less than its intrinsic value.

 

[Romeo1998]

beautiful banknipthy is never dissappoint
ab hamar trading finish
ab ham lunch banayega aur fir lunch khaayega aur fir monsoon enjoy karega

 

[apegaonkar9]

Today hopefully market closes in green.
Now it matter of Banknifty don't know it will close in green.
Emotions are playing very wild .
The operator are opening market down and keeping down for quite long hours. And accumulation happens.
It's all mind game.
But every time everyone cannot be emotionally and mentally strong. He get caught in dilemma and make mistake. It's human nature fallacy.......

 

[apegaonkar9]

Market it self play in levels.
Hope banknifty will be in green after averages.

 

[raju.vzm]

US PE firm offloading some stake... received from whatsapp, so authenticity not guaranteed Raju sir...

Yes,, got the news... Thank you

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[apegaonkar9]

Yes now nifty is above 15700. Hope this will maintain on closing basis.
Monday Market will open gap up.

 

[apegaonkar9]

My August banknifty is in red other series comes in green.

 

[apegaonkar9]

Yes now nifty is above 15700. Hope this will maintain on closing basis.
Monday Market will open gap up.

It's hear break .