Query about Nifty options

Hello Traders,
Hope you all doing good.

I’m a novice trader and interested in trading Nifty options. Can someone tell me whether one should look at Nifty underlying or Nifty futures chart to trade options?


If you are novice then Stay away from options
If you have learned options then obviously look for underlying chart

Ideally, you should look at the Nifty underlying as most of the time the difference between the underlying and the future is not very significant. However, if the difference is significant then follow the future. Actually, these are Options-on-the-underlying index, so at expiry the underlying price will be the decider, however, when the future is significantly away from the underlying then the Options premium does seem to follow the future price (else significant arbitrage opportunities will arise amongst the Future & the Options). You can observe this phenomenon with BankNifty F&O where at times the future is far away from the underlying.

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You can use either of the charts for analysis purpose, but make sure tht the same is used as the Underlying for option pricing.

It is an Observation tht Option premium values track Future price movement closely than the Spot price movement except on the Expiry day.

Thanks Ashish, iSTFF, sdg…

Sorry for Ill advice
and thanks, @iSTFF , @sdg for rectifying my error
I didn’t know that :neutral_face:

No worries…