Will this strategy work in options (close price)

Yesterday at 3.29 p.m price of maruti 7000 ce was at 13 rupees , but when i checked morning it was around 16 rupees , later found that close price was calculated by last 15 mins average price (Vwap).

So if i find and buy scripts which is below VWAP like 3 or 4 points will it work ? So next day close price is increased.

but you will be able to sell at open price of next day, which can be anything.

yea that is ok , but will this strategy work ? I can get cheaper when i buy something at 1 rupee , all i risk is 1 rupee for 1.3 rupee , if market remains same next day.

bhai, you are dealing with options. Everyday you hold the contract, the price goes down by the theta decay.

16 is just the average closing price (VWAP), morning opening price when you want to square of your position can be anything, from 0.05 to infinity! so yes, if your direction is right you’ll earn, if not you’ll lose. There is no arbitrage between LTP and VWAP closing. Even though VWAP price was 16, you need to find a counter party who’ll buy it from you for 16, VWAP is used only for MTM settlement and does not reflect current market price.

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if you trade to earn 30 paise, you’ll pay more in commissions, and if you want to scale this strategy, then your actually risking more money, if the market moves against you. There’s no free money in the market. If you want to earn, you’ve to take risk and bet on your assumptions.

You cannot trust VWAP or any indicators for real price action (i.e. stock movement). I’ve seen prices closing way below VWAP and next day price going down and Ms. VWAP going behind price.