How does the price differ in the call option contract when it gets closer to the expiry date? - nifty option price
I saw the price of about 68 for Call 4600 (Friday 24) and fell to 48 on Monday, but ended up with the ingenious 3rd
No one can explain why this has happened and what is the right time to buy an option contract and when to sell.
Thanks ~
Saturday, January 9, 2010
Nifty Option Price How Does The Price Differ In The Call Option Contract When It Gets Closer To The Expiry Date?
2 comments:
Typically, the extrinsic value (and sometimes the time value) of an option approaches expiration decreases. This means that the option price cuts typically over time, but certainly not always true. The value of a particular option may change because of one of the following changes:
(1) The price of the underlying
(2) The amount of time before the expiration
(3) The implied volatility of options
(4) risk-free rate
(5) This follows the ex-dividend date
\\ \\ \\ \\ \\ \\ \\ \\ U0026lt \\ \\ \\ \\ \\ \\ \\ \\ u0026lt \\ \\ \\ \\ \\ \\ \\ \\ u0026lt, I saw the prices of about 68 for Call 4600 (Friday 24.), and it fell to 48 am Monday, but the brilliant 3rd
No one can explain why this has happened,>>>
I do not understand, not the options on the Nifty index, and then specify the expiry of the option, so you can make a reasonable guess. If the option expires soon, say at the end of the month, the decline is probably due mainly to the theta "(the lower) the price of an option due to the passage of time. If at least one months afterDistance is probably the decline mainly to the "Vega" (change) the value of an option to a change in implied volatility.
\\ \\ \\ \\ \\ \\ \\ \\ U0026lt \\ \\ \\ \\ \\ \\ \\ \\ u0026lt \\ \\ \\ \\ \\ \\ \\ \\ u0026lt, What is the right time to buy an option contract and when to sell.>>>
The schedule depends on the risk-return profile that you want. For example, can lose when you buy an option money in the foreseeable future have to pay a small premium, therefore have a low risk, and you have the opportunity to share have enormous benefits, but also a loss of 100% Most of the time. Some people find attractive, others not.
I generally prefer options with more time to maturity and sell options to buy with less time to maturity. Unless it is used to cover a different location, usually prefer to avoid a long position in options for at least two weeks before the due date close to keep the option if theta is at its highest level.
Hello Saravan, the option is called the decay time approaches the expiration date of the price movements in the prices of underlying assets, and finally take the time
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