Hello trader
Plz see screshot last week March expiry 17300pe closed at around 13 rupees. Even nifty fut closed at 17325
My question is why 17300 pe did not go close 0.5…bcz nifty close above 173500…plz see screshot nd let me know
Where did NIFTY spot close?
The underlying for options is Nifty spot and not Nifty futures.
In the commodity market such as Crude Oil, we do have options on futures but not on the stock market.
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It close below 17300…does it matter ?? Bcz i thought i should look future price not spot price
U mean to say we should look nifty spot price not future price?
For monthly expiries, the futures and options settlement should be identical but since, we don’t have weekly futures, we can’t compare the two contracts. They have different expiration dates.
I did not understand you…my question is nifty 17300pe should be 0.5 if nifty future close above 17300…but it close around 13 rupees…
Nifty spot price close below 17300
Are we supposed to look spot price not future price??
The expiration date for the futures contract you are looking at is 31st March but the option you’re trading is expiring on 17th March. It can’t be compared.
As a simple rule, since options settlement happens on the spot price, it’s better to look at the spot price. You should also read about the last 30 mins average close rule.
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Ok let’s assume it was 31st March expiry…and nifty future price close above 17300…nd spot close below 17300…
In that case 17300pe will be 0.5 or not??
Ok let’s assume it was 31st March expiry…and nifty future price close above 17300…nd spot close below 17300…
In that case 17300pe will be 0.5 or not??
Look at spot nifty… don’t look at future pricing.
And yes it should close at 0.05 if nifty closes above 17300 on expiry day.
But you are looking at 17th march expiry options… which day did you take the screenshot?
In this case, both the futures and options will be settled at the spot price.
Most likely, even the Nifty futures will close near the spot and not above 17300.
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true that option values are derived from future value, but here you are referring to monthly future for weekly option expiry which will not give the correct picture (actual future value for this expiry would have been between spot and monthly future, more closer to spot which would ultimately converge with spot price) . though it may not be entirely correct to say but looking at spot price makes sense for weekly expiry.