I bought dec 2024 22000 pe for 474 and sold april 2024 22000 pe for 114. Sensibull shows losses of 70 to 75 thousand (yes it varies daily and perhaps intraday). Raised a help ticket requesting them to let me know the spot price and IV when the loss will be 70 to 75k. They did respond but I could not make head or tail of that. How can the loss be more than 18000 ( 474-114 = 360) * 50. There could be some change here because april and dec expiries may not move proportionally but can that be so huge? Can someone explain the exact spot value and IV where the loss can be so huge?
yes far away expiry put will trade with discount. the discount will be bigger when it goes deeper ITM. so sensibull calculates what if that put goes ITM and showing possible max loss.
Thanks. I understand that the far otm will not move exactly the way the near otm moves. but the discount can’t be more than 30-40 rupees at the most. if i have to lose 70k appr, then the discount should be around 1400. will that ever happen?
it does happen when market crash and your dec put goes ITM. check the price of dec 24000 and above put, they are trading with 1000rs discount.
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Thank you. I was under the impression that deep ITM will behave like future. Dec 24000 is in 980-1000 range whereas it should be at least 1400. Thanks for the reply. But I took the position assuming the market will breach 23.5k on the day of results. at least it will not be less than 22000. idea was to recover make about 10k profit in six months. this was a test trade with just one lot. hope it does not have such huge losses on the higher side. Can the loss be more than 360 points if the index moves to say 25000 in june? I am talking of 360 points because that is the debit in my account for this position.
if the market ends above 22k you are good. problem only if it goes below 22k
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