Here is a weird chart of banknifty 38000 ce (march 18 expiry).
The 38000 CE option premium kept increasing though the underlying BANKNIFTY index value kept falling… yes, the vix increased by a % or so but this is ridiculous… Can anyone share the logic behind this behavior?
Far away options are hedging instruments eg: People sell current ATM CE and BUY FAR OTM CE to get the margin benefit. Its the usual business nothing unusual about this . No issue in Zerodha!!
These are super far OTM, no logical reasoning can be given to their movement just before closing when there is 1 day to expiry, these becoming ITM has lesser chances than winning in Russian roulette. Also today night FED outcome is expected, so few may be closing their position or taking a gamble.
Can a Fed decision influence banknifty to move 10% in one day?
am really scratching my head as to which intelligent person would be buying at such prices and in huge quantities at the end of the day.
I mentioned the general trend; main reason for your instrument ->38000CE is due huge square off of sell options. People who Sold 38000CE and sitting on profit have square off there positions. Change in OI will tell you that.
correct, 3 days before you have shorted this instrument around 130 now you are sitting on profit and you square off in bulk which increases premium 3 rs from 6 to 9 , would you care about these pennies:stuck_out_tongue_closed_eyes: