Huge Mismatch in premiums of adjacent strike prices.

Look at the premium of Strike price@10450.
Look how huge drawdown of premium has occurred with respect to nearby strike prices.
Can anyone tell me the reason of this?

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Low volume . Low OI

It means price discovery is not efficient.

So you will see random price changes

It wont happen at High OI strikes which have round number strike price like 10400, 10500

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Can you please elaborate what is the meaning of price discovery here.

Means if number of trades/buyers&sellers for an option is lesser, then they can set any price for it

Lets assume no one is trading Nifty 8000 CE. Its real price should be something around 3000 as per Nifty 10900.

But since no one is trading, I can put a buy order at 100, and ask some of my friend to put sell order at 100. So with this transaction the price of the option whose fair value is roughly 3000, the price is now 100.

Next day some serious people start trading it, maybe next traded price is 2500. So it will show Change of +2400 next day, and it will look odd in the option chain compared to the strike prices around it.

I have given an extreme example but hope you understand the point, if trades/buyers sellers are less, the price changes are not efficient or logical sometimes.

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You want to say that ,
Less liquidity leads to high, illogical & may be manupulating premium movement.

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@Newbie420 Thank you so much for explaining it so nicely. I completely agree with you. I have noticed such incidents myself in some option contracts.

Best Regards

There maybe mismatches because price discovery is not effecient, but can this remain so on expiry too ?
Or does it correct on expiry ?