Approx value of less liquid contract

F&O
1

I trade in liquid F&O contracts (95% of times) but there are times where I need to buy positions in less liquid contracts. For Eq. I want to hedge my long position in Shriram Transport by buying SRTRANSFIN NOV 740 PE with spread 1.45 / 2.05.

The spread is bit wide and I don’t know if I should place the bid closer to 1.45 or 2.05. I would like to ideally goto a website and find the approx value of this contract at any given time to place appropriate bids.

Please let me know if there is a website / calculator for this.

2

To calculate theoretical Option price, you can check out the Black & Scholes calculator. You can read this post to know how to use the B&S Calculator.

3

Thanks Shubh. I am aware of B&S calculator but I find it complicated. I was looking for relatively easier way (maybe thru a website) to punch in the details and get the value.

Any pointer in this direction would be helpful

4

Not aware of any such website :slightly_smiling_face: Above I’ve given you link to a post on how to use B&S Calculator, maybe that will help you, do check it out.

5

I checked it out and wasn’t able to proceed too far. The premium I got from B&S calculator was different from the possible range. Maybe I needs more expertise.

Anyone aware of website / calculator which can give approx premium values for less liquid far month contracts?

Appreciate any help

6

don’t think there is any such website, black - scholes calculater is used industry wide to calculate option premiums, maybe you should spend more time inputting different values or maybe research a little more on how to use.