OTM Lower cap issue

Ravi_GK · January 25, 2024, 10:05am

Please tell me why there is a lower cap in OTM CE option of Lauruslabs, 410 CE strike price @ 2.8, while it is 0.05 in 400 CE strike price. I couldn’t able to cover the said option even in expiry day. The same is problematic in othr stocks also

Ananth · January 26, 2024, 6:43am

Hi @Ravi_GK,

For Index and Stock Options: A contract specific price range based on its delta value is computed and updated on a daily basis.

There are no particular % set as upper and lower circuit for options but it set as operating range. If contracts have no or low liquidity, operating ranges vary based on its delta value. This is updating from exchange market depth ticker itself.

Ravi_GK · January 26, 2024, 7:24am

The above strike price which has even lesser liquidity than the said strike price has a lower cap 0.05. Please find the below screen which may throw some light. Also it is happening in other stocks as well. Liquidity does not seems a problem here.