Recently I bought an Axis bank 850 CE option…My Question is Today this Morning (28-Apr-22), axis
bank opened at 776.90. The same 850Call option opened at 9.20 later axis bank share price went to 785 but option call is not moved that much…bit option contract price should be moved above 9.20
Can anyone clarify?
Options price movement will not be same as underlying price movement due to the greeks. In your case as the price of stock opened, it fell for some time and made a high in the afternoon. By that time the price of option will also decrease and will try to recover when the stock makes high. Also since the call strike is OTM, delta is less. Hence the price movement in stock will not result in similar movement in options price.
Option premium depends on how fast the option moved in your direction + india vix.
It can be seen that india vix reduced by 5% today. So even if underlying moves in your favour, option premium will lose some of its value due to reduction in indiavix.
Varsity is free for all… easy to read and understand… invest your time in learning before you trade…
Yes, it did not move and that is why most options buyers lose money!
Please study the Greeks, implied volatility & India Vix, etc from Varsity prior to engaging with option buy contracts.
