Can some1 explain this today tata global CE premium movement of strike 280 and 290
Today the stock went till 280 but closed at 273
But the strike of 270,275,285,295 all went up
But then why strike 280 and 290 went down ??
@nithin @Spaceship @Abid_Hassan
Good question. Well Mr nithin & abid can answer it better than anyone. I have not tracked this stock while writing this post.
But you need to track this stock’s futures price movement which is the underlying in this case & not actually the spot price of stock.
Futures price can trade at premium or discount depending upon factors like number of days left to expiry, overall market sentiment, volatility, etc.
If more days are left to expiry & markets also seem bullish then futures would trade at premium.
And next month futures/options would be trading at higher premium than current series. Its cost of carry.
Regarding options pricing model, Its based on black scholes calculator & while deriving premium pricing lot many factors are involved which you can refer to the basics in varisity by zerodha or Mr Abid can surely put more light on this matter.
Also note one important point, many times the underlying has changed up or down but few strike price(s) of its options counterpart doesn’t anticipates similar movement in premium.
This happens many times because of less liquidity & less trades participation as the LTP doesn’t gets updated simultaneously with effect of movement in underlying.
Suppose Airtel stock futures have moved up by 5 rs but you may not see immediate increase in respectively strike price calls as the buyers are not willing to quote higher buy price whereas sellers dont want to sell at lower price. So until a realtime trade happens , the change in LTP is not immediately reflected.
It seems you are checking 28dec2017 expiry. Only few traders trade on this that’s why the difference.
Yes i am checking for december series, but despite that open interest for all and traded volume is good for all strikes
