Why did the Puts eroded so fast when the spot price also came down? We are not even half the way through to expiry.

#1
Hi there

I’m an active trader in Sun pharma. A strange thing that I noted today is that the put prices came down exponentially even though the spot price also came down. I couldn’t comprehend the correlation. Could someone pls explain this phenomenon and the possible reason behind. Thanks.

Like : SUN PHARMA 520PE was trading at 7.50 when spot was around 542 though within a couple of mins to closure spot came down and closed at 540.5 but the 520PE crashed and closed at 6.75



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simplebuthard

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#2
7.50 to 6.75 is that a really crash?

sun pharma 5% gainer hence up trend may resume in coming days. hence put writers may go extra length.
 
#3
7.50 to 6.75 is that a really crash?

sun pharma 5% gainer hence up trend may resume in coming days. hence put writers may go extra length.
It happened in the last 1-2 min when the spot also came down. Until then it was holding on to 7.5 even though the spot was much higher.

Hmm, I agree on the bullishness on the stock. May be the put writers would have believed the stock has still something left in the tank to move.


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