ATM for a strike price

F&O
1

Suppose spot price is 11430, then what is the ATM strike? I guess 11450 (nearest one) but in many places i find no such rule applied and any of the near ones available are declared as ATM on the writers discretion…

2

One can consider both 11400 and 11450 as ATM strikes in such cases, though the premiums they will be trading at will be little different but Greeks will be almost similar.

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3

thanx @ShubhS9 dude for the prompt reply.

4

Sir i have some doubts… Can you or anyone please clarify :-

  1. Some stock’s strike price are at a difference of Rs 50 and others are at a Rs 100… Why this is so?

  2. In the above example we can choose the 11400 and 11450 as ATM strike price… The premium are little bit different is this is because the intrinsic value of the option or the extrinsic value of the options… as because the greeks r almost same…

Always appreciate your replies
:pray::pray:

5

Intresting question but not really sure, can be due to price of the stock, for example take SBIN, it is priced at around 200 and has strikes at difference of every Rs. 5, while Infosys is at around 1100 and has strikes at difference of every Rs. 20 and as you know Nifty has difference of Rs. 50 while Bank Nifty has difference if Rs. 100.

If underlying is at 11430, then theoretically 11400 Call will surely have Intrinsic of Rs. 30 along with time value, implied volatility while 11450 will have time value and implied volatility.

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