Premium Decay in nifty

TradeOptions

Well-Known Member
#4
Thanks vegar11. Are these white charts from Matlab or R or something else ?
 

travi

Well-Known Member
#6
in option trading,nothing except time decay is certain, iv factor comes into play but the effect gets eroded in few days and its all about manage the positions and when to avoid short positions in options. > this is what we need to learn & master.
The timing to Option writing is most important.
Ideally, they are written well before expiry, generally, for the next series. Writing options near expiry is the suicidal story.
Many on TV say that so and so options are cheap, 10-40 rupees and can be written and pocket premium is hogwash.
The two scenarios are:
1. An option is written for Inr. 250 about 50 days before expiry.
Even on expiry day, if it jumps from 10 to 100, you are covered.

2. Same option written 5 days before expiry at Inr. 30 on expiry day jumps to same 100 and you know rest of the story.
Then even try to manage the acceleration by buying to cover, won't work.

To write options 2 or 3 series before expiry requires capital that only the < 1% have :D
 

Subhadip

Well-Known Member
#7
The timing to Option writing is most important.
Ideally, they are written well before expiry, generally, for the next series. Writing options near expiry is the suicidal story.
Many on TV say that so and so options are cheap, 10-40 rupees and can be written and pocket premium is hogwash.
The two scenarios are:
1. An option is written for Inr. 250 about 50 days before expiry.
Even on expiry day, if it jumps from 10 to 100, you are covered.

2. Same option written 5 days before expiry at Inr. 30 on expiry day jumps to same 100 and you know rest of the story.
Then even try to manage the acceleration by buying to cover, won't work.

To write options 2 or 3 series before expiry requires capital that only the < 1% have :D
Exactly....
 

vagar11

Well-Known Member
#9
@vagar11,

How did you get CE +PE charts.? Y axis seems to be the combined premium.What is plotted on X axis ?

ST
Sir, I plotted those using python matplot library. The data I have used from Kite.
Y axis is combined premium of call and put for different Strike Prices.

X axis is denoting the time. It is starting from 3rd Oct till yesterday. There are total of 208 points that have been used for that.
 

Similar threads

Broker Special Offers

Intraday Higher Leverage

Save up to 90% in brokerage and get higher leverage for intraday trades.

Name:Phone:
Email:City:
State:
Are you a day trader?