[11:28AM, 29/01/2015] Mudraa JP: please teach us on how to know the correct value of option... like you said. ..currently high premium. ..etc.. can we take this topic on weekend ??
[11:29AM, 29/01/2015] @: see.....more the premium,more valuable the thing, likely the likelihood
[11:31AM, 29/01/2015] @: e.g. cmp=8867spot.......feb 8800 call is costing 258/-.....meaning a premium of 191
[11:31AM, 29/01/2015] @: feb 8950put is costing 186/-.....meaning a premium of 103
[11:33AM, 29/01/2015] @: assuming operators are the sellers of the options (and assuming they are smart chaps), they must be aware of the costs they are asking for the puts and calls.....so why are they asking less for the puts than calls? (u can see that cmp is approx equidistant from both the strike points i have taken)
[11:34AM, 29/01/2015] Mudraa JP: Ok..
[11:34AM, 29/01/2015] mudraa p murlidhar: Ok sir
[11:34AM, 29/01/2015] @: this indirectly clearly hints that operators know that they are going to take the market up (ultimately) because of fundamental developments (foreseen and current), and they want we sheeps to eat cheaper puts
[11:34AM, 29/01/2015] mudraa Dinu prasad:
[11:34AM, 29/01/2015] @: there is another aspect.....
[11:36AM, 29/01/2015] Mudraa JP: Alright, does it mean..the operators will tend to go the other way ?
[11:36AM, 29/01/2015] @: e.g. if feb 8800call is costing 258/- on jan expiry, it might cost 58 or 158 or 358 for the same strike next expiry day (assuming cmp remains same)
[11:37AM, 29/01/2015] @: everything depends upon the travelling plans of operators (up or down)
[11:37AM, 29/01/2015] Mudraa JP: I c..humm getting a bit more closely now
[11:37AM, 29/01/2015] @: yes, operators always go the other way....they have to....otherwise they are not the operators, public is
[11:38AM, 29/01/2015] @: one more thing.....
[11:38AM, 29/01/2015] Mudraa JP: Please
[11:39AM, 29/01/2015] @: the fact that difference in the call and put premiums (or cost) of feb series of equidistant strike points is not that much (258 vs 186) shows that thow markets are finally expected to go up, its not tilted that much towards upside!!!
[11:39AM, 29/01/2015] @: this is indicating intermediate slides and crashes
[11:41AM, 29/01/2015] @: so, u can't decide whether the cost of a particular option is low or high or right
[11:41AM, 29/01/2015] @: u just have to compare the price and premium of strike prices equidistant from the cmp and check
[11:29AM, 29/01/2015] @: see.....more the premium,more valuable the thing, likely the likelihood
[11:31AM, 29/01/2015] @: e.g. cmp=8867spot.......feb 8800 call is costing 258/-.....meaning a premium of 191
[11:31AM, 29/01/2015] @: feb 8950put is costing 186/-.....meaning a premium of 103
[11:33AM, 29/01/2015] @: assuming operators are the sellers of the options (and assuming they are smart chaps), they must be aware of the costs they are asking for the puts and calls.....so why are they asking less for the puts than calls? (u can see that cmp is approx equidistant from both the strike points i have taken)
[11:34AM, 29/01/2015] Mudraa JP: Ok..
[11:34AM, 29/01/2015] mudraa p murlidhar: Ok sir
[11:34AM, 29/01/2015] @: this indirectly clearly hints that operators know that they are going to take the market up (ultimately) because of fundamental developments (foreseen and current), and they want we sheeps to eat cheaper puts
[11:34AM, 29/01/2015] mudraa Dinu prasad:
[11:34AM, 29/01/2015] @: there is another aspect.....
[11:36AM, 29/01/2015] Mudraa JP: Alright, does it mean..the operators will tend to go the other way ?
[11:36AM, 29/01/2015] @: e.g. if feb 8800call is costing 258/- on jan expiry, it might cost 58 or 158 or 358 for the same strike next expiry day (assuming cmp remains same)
[11:37AM, 29/01/2015] @: everything depends upon the travelling plans of operators (up or down)
[11:37AM, 29/01/2015] Mudraa JP: I c..humm getting a bit more closely now
[11:37AM, 29/01/2015] @: yes, operators always go the other way....they have to....otherwise they are not the operators, public is
[11:38AM, 29/01/2015] @: one more thing.....
[11:38AM, 29/01/2015] Mudraa JP: Please
[11:39AM, 29/01/2015] @: the fact that difference in the call and put premiums (or cost) of feb series of equidistant strike points is not that much (258 vs 186) shows that thow markets are finally expected to go up, its not tilted that much towards upside!!!
[11:39AM, 29/01/2015] @: this is indicating intermediate slides and crashes
[11:41AM, 29/01/2015] @: so, u can't decide whether the cost of a particular option is low or high or right
[11:41AM, 29/01/2015] @: u just have to compare the price and premium of strike prices equidistant from the cmp and check
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