Put option Premium increase

#1

Hi everyone,

When a put option’s premium keeps increasing when underlying price is also increasing,
Is there any reason this happens? or is it a sign of any things to come?

I am new to trading options, so have this doubt. If someone could please clarify or provide a source where this is explained, it would be very helpful.

#2

Read the last part

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#3

Yes it’s happening some times as underlying’s future prices built heavy openinterest and expecting of overbought or any preior to announcement effectively, than takers of long positions in future go for hedging their positions by buying Put options as if conditions Call options may trading at low price as of their IV.
I think you cleared.

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#4

Wow, thank you so much for the quick response. This explains it clearly. I had started reading options chapters on Varsity, but hadn’t come to this part yet. Thanks again.

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#5

Book knowledge guide us only definitions, rules and efforts , but practice only teach how & when and what is an advantage.
Thank you and keep careful observations they only exploit ideas, good luck.