Why call option price decreased today(27-Aug-2015) for NIFTYOCT2015 8900CE from yesterday's price, even though today the nifty was up by about 157 points?

Why call option price decreased today(27-Aug-2015) for NIFTYOCT2015 8900CE from yesterday’s price, even though today the nifty was up by about 157 points? My understanding is, if the stock price increases call option price also will increase. Any one please explain.

Implied Vols have fallen from levels of 25 to 22 ( a 13 % decrease ) .Option Pricing involves Volatility as key component to its pricing.An volatility increase will increase prices of both Call Option and Price option and vice versa.

1 Like