Please read my query

I searched for quite some time but could not find a similar question. i have 2000 shares of sbi purchased at roughly 200. That is i spent nearly 4 lakhs. I want to buy another lot if it falls to say about 165/-. It went to about 155 recently. My query is something like this. I will add 165*2000 = 3.7 lakhs or 4 lakhs in the account. I will sell june 205 ce at 9.2 ( I will not lose my principal even if the stock shoots up to 1000 because I have 2000 shares with me and I am aware of losing the potential profit). I will also sell one lot of jun 170 pe at 4.2/-. My request is to let me know the probable price of the put option if the stock falls to 155 or less before expiry. How much will the cost of the put option be if the price falls to 155 or 150? I request experienced traders to guide me in this please.

Option price = Intrinsic value + Time value

What this means is as soon as SBI falls below 170, it becomes in the money (or has intrinsic value). Time value will keep reducing as expiry approaches. 

If SBI say goes to 150, the 170 PE will be minimum of 20 ( 170-150= intrinsic value) + Time value. Typically deep in the money options usually has smaller time value compared to out of the money option. 

In short, if SBI is at 155, 170 PE will be atleast Rs15 an if at 150 atleast Rs 20. Suggest you to read the option module on Varsity. 

Thank you very much for explaining. Can I then hold the option till expiry and buy the shares at the then prevailing price? Assuming it comes to 150 on expiry, I will be losing rupees (20-premium of 4.2) * 2000. That is about 31,600 while I can buy the 2000 shares at 3 lakhs instead of the today’s price of 3.78 lakhs. 188.9*2000). Is my understanding correct? I find the option module very interesting and enlightening. I will certainly go through it in detail. Don’t know that someone can place such information for free. Great service by Zerodha. Even tradingqna, that I stumbled upon while googling trading queries is very helpful.