astonishing observation
this morning nifty opens 100 points gap up.
a 160rupee put becomes 80 approx (fall of 50%)
whereas a 160rupee call goes up by a meagre 35points (just 20% instead of 100% rise which is reverse equivalent of 50% fall of put)
shocking, at the surface of it.
but, what does it mean?
does it mean
- that the call was very costly (super premium) which has just come down to realistic levels?
- does it mean that operators are bullish and going to take the market higher.
- they will eat put premiums big way and give nothing to the call buyers? eventually eating their premiums also as they reach sufficiently high?
- does it mean that if a pro trader was to guess the direction of the market rise, than selling/writing puts and calls of the boundaries of the estimated range can be a safe and lucrative bet?
this morning nifty opens 100 points gap up.
a 160rupee put becomes 80 approx (fall of 50%)
whereas a 160rupee call goes up by a meagre 35points (just 20% instead of 100% rise which is reverse equivalent of 50% fall of put)
shocking, at the surface of it.
but, what does it mean?
does it mean
- that the call was very costly (super premium) which has just come down to realistic levels?
- does it mean that operators are bullish and going to take the market higher.
- they will eat put premiums big way and give nothing to the call buyers? eventually eating their premiums also as they reach sufficiently high?
- does it mean that if a pro trader was to guess the direction of the market rise, than selling/writing puts and calls of the boundaries of the estimated range can be a safe and lucrative bet?
2 comments:
your helpful i like it keep the good work
Stock Market
Your observation is really astute.But why you have stopped writing on the subject for last 1-2 years.
Post a Comment