Re: Feb series-Day7 ,NiftySpot:5362 (+36)
Hi valuable_earner,
effective zone should not be in btw 4900-5600
Effective Zone is common to both CALL window and PUT window.Hence
4900~5400 is appropriate for your example.
strike price 5600 calls are above Rs. 10
Values in white indicate a value of option less than Rs.10.As on date,there
is LIKELYHOOD of going for less value.It is not hard & fast rule that
they will go penny ,because a reversal will see them grow.But it is a mere
warning.In the example shown by you 50% of PUTs (4300~4800) are
in white indicating remote chance of falling to such levels.Puts in this window
have derived strength not because of their intrinsic value but because of
low value.
One more thing ... what this effective zone represent?
As a thumb rule NiftySpot 300.The value keeps on reducing as expiry
is nearing.
Thanks for making me understand my queries
Now just a point in this image effective zone should not be in btw 4900-5600 as till strike price 5600 calls are above Rs. 10?
Does it bcz we are calculating btw PUT n CALL common zone and the common are btw 4900 and 5400 ... other strikes are outside the common area?
One more thing ... what this effective zone represent? Does it represent that nifty will move in btw these level till expiry till there is NO CHANGE?
Correct me pls if i am taking it wrong.
Thank You Again
Regards
Now just a point in this image effective zone should not be in btw 4900-5600 as till strike price 5600 calls are above Rs. 10?
Does it bcz we are calculating btw PUT n CALL common zone and the common are btw 4900 and 5400 ... other strikes are outside the common area?
One more thing ... what this effective zone represent? Does it represent that nifty will move in btw these level till expiry till there is NO CHANGE?
Correct me pls if i am taking it wrong.
Thank You Again
Regards
effective zone should not be in btw 4900-5600
Effective Zone is common to both CALL window and PUT window.Hence
4900~5400 is appropriate for your example.
strike price 5600 calls are above Rs. 10
Values in white indicate a value of option less than Rs.10.As on date,there
is LIKELYHOOD of going for less value.It is not hard & fast rule that
they will go penny ,because a reversal will see them grow.But it is a mere
warning.In the example shown by you 50% of PUTs (4300~4800) are
in white indicating remote chance of falling to such levels.Puts in this window
have derived strength not because of their intrinsic value but because of
low value.
One more thing ... what this effective zone represent?
As a thumb rule NiftySpot 300.The value keeps on reducing as expiry
is nearing.