Strike price query
How many strike prices available for every stock?
How strike prices are formed?
Any formula???
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The number of strike prices range from
11 (5 ITM +1 ATM +5 OTM)
to
21 (10 ITM +1 ATM +10 OTM)
The strike interval is the gap between one strike to the next strike. In olden days strike price is calculated purely based the stock price, example stocks which are having price lesser than 500 get 11 strikes and stocks which are above 500 get 21 strikes. Nowadays strike interval is calculated based volatility in the stock price movement. The step value ranges from 2.5 to 50.
Hence NSE prepares a list of stocks and its strike price ranges and releases it in this link.
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What is the logic of choosing the number of strikes, Any idea???
AastroGuru : your efforts in answering to the queries in a clear and consice manner is commendable. Good Job !
@ AastroGuru, wonderfully explained. It’s always a pleasure to read your answers.