How to Find Call Premium Price on Intraday?

[spiritunit]

Intraday: Ex. If Nifty is in 4955 and the call 4900 is trading at Rs.70, at this stage, I like to place a call-buy order if Nifty crosses over 4980, but I am confused what will be the premium price while Nifty is at 4980, how can I find it?

 

[findvikas]

Premium will be different depending upon the days left & other parameters... you technically cannot predict the exact price for the put/call on the basis of SPOT price. the price of option is controlled by demand/supply... and what majority is expecting from SPOT levels...

 

[thimma]

In absolute mathematical terms you can use the below calculator.

http://www.equitymaster.com/derivatives/derivative.asp

Indian markets rarely follow this model. But you can get an idea.

 

[spiritunit]

In absolute mathematical terms you can use the below calculator.

http://www.equitymaster.com/derivatives/derivative.asp

Indian markets rarely follow this model. But you can get an idea.

That's quite interesting!

But how can I find the
Interest Rate (%
Volatility (%)

If you know this, please show me an example of the current market level. i.e. Nifty spot on 4958.95 and the call 5000 strike price is at Rs.130, then what input I have to insert?

 

[chachi]

Intraday: Ex. If Nifty is in 4955 and the call 4900 is trading at Rs.70, at this stage, I like to place a call-buy order if Nifty crosses over 4980, but I am confused what will be the premium price while Nifty is at 4980, how can I find it?

As pointed out by others the Option price depends on various fators and it will be difficult to predict what price it will be at certain point.

I noticed the following during intraday.

The Option price depends on how fast 4980 is reached from 4955. Suppose this 25 point is reached within 10 minutes non-stop, then the 4700 call rate may reach 85-90 also. On the other hand if this reach is slow and with lot of fluctuation it may struggle to reach even 80. Also it depends on the time left for further trading of the day etc.

If I am holding a Call like the above say at 70 and want to sell at some profit and the trend is bullish, I may put my sell price at 90 and wait. Also I prefer to check Nifty tick data at the point of buy or sell.

Keep watching both nifty tick data and Option price to know the behavior and you will, over a period of time, will be able to use it for catching good buy/sell price.

 

[chachi]

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duplicate post

 

[thimma]

That's quite interesting!

But how can I find the
Interest Rate (%
Volatility (%)

If you know this, please show me an example of the current market level. i.e. Nifty spot on 4958.95 and the call 5000 strike price is at Rs.130, then what input I have to insert?

Visit http://www.nseindia.com/marketinfo/fo/foquote.jsp?key=FUTIDXNIFTY29OCT2009--25SEP2009&symbol=NIFTY&flag=1 Scroll down to get the Annualised Volatality at other information section. You can get this information for any stock and index.

Rate of interest can be calculated by taking the bank interest rate. Lets say 8 or 10%.

So for Strike price 4900, Spot 4958.95, Expiry date as 29-Oct-2009, Volatility 25.85 and interest rate 8.00 % I get the theoratical value of 198.18.

The LTP at nseindia is 184. So it means the price is cheap. Remember this is always not true with Indian markets. So it's buy/sell with your own risk. The above information is for illustration purpose only.