Today’s CAS saw a huge list of stocks moving 2% in either direction but stock options not aligning to the closing prices. For example, if we look at HAL, closing price was 4549.30 but 4600PE has seller at 1.00, whereas its value should be 50.70. Surprisingly, 4600CE had a buyer.
Coforge the next interesting one. Because after cas, the price was 1722 frm 1770. But you will be shocked that 1740PE and 1760PE was still giving 0.05 and you could have easily purchased 10 lots of that. Amazed by who is the seller, why would anyone still keep their orders. At 1770, 1740 was OTM but after CAS at 1722, it is ITM. and for 1760PE, it is deep ITM. But no movement in the above mentioned puts.
You will find simiilarities with many other counters. UnionBank 167.5PE, at 0.01, whereas post CAS, it was 166. MCX, an active counter, post CAS it was 3232 and 3250PE was at 0.05. In Gainers, Glenmark moved from 2370 to 2440 but 2420 CE was at 0.05.
If the options were settled in cash, there was a gold mine for option buyers. But the main question is - Are we ready for CAS in stock options? Stock options already have very thin liquidty, and on top of that CAS movments don’t make effect. Should stock options be removed from CAS purview, and only Index Options to be kept?