Can you guys share some light on Strategy in choosing fno stocks & strike price for intraday & BTST
as we know that option are the contract that give you a right but not the obligation to buy or sell an underlying asset on fixed future date at specified future price.
: As the premium of Option Depend on two values that is Time value of Money it is value of money according to time , s option are the 1 month expiry contract where Time value of Money decrase as we are near to expiry.
And Intrinsic value , it is the different between the strike price and spot price.
Premium = Time value of money + Intrinsic value
For call Intrinsic value = Spot price - Strike Price and for Put Intrinsic value = Strike price - Spot price.
So in Simple language intrinsic value of option contract is generally a difference of strike price and spot price while strike price is the price at which an individual want to exercise the contract. an individual contract of a strike price itself a option contract ,thus this strike price can be divided into three contract.
AT the Money : where the the Current Market price nearest to the strike price.
In The Money : Where the CMP is higher then strike price and premium also high in call otpion and vice versa to Put Option.
Out of the Money : where the CMP is lower then strike price and premium is low.
hence while selecting the strike price in option any individual can consider first his risk on investment , duration or investment as the option are the 1 month contract cycle an follow three month contract cycle as well underlying asset because the price of option depend on underlying asset.
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First thing u need to do is list out the MostActive in F&O. Goto to the MostActiveUnderlying list on nseindia website. Sort out by Volume & choose the Top10 in the respective Category (Futures/Options). These would be active atleast fr the subsequent 3-5days.
(https://www.nseindia.com/live_market/dynaContent/live_analysis/most_active_underlyings.htm)
Based on ur Risk Capital, choose the strikes near to In-the-Money.
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Great thanks for sharing