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

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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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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