The intrinsic value is determined by the difference between the current trading price and the strike price. Only in-the-money options have intrinsic value. Intrinsic value can be computed for in-the-money call options by taking the difference between the spot price and the strike price. Intrinsic value can be computed for in-the-money put options by taking the difference between the strike price and the spot price. Out-of-the-money options have no intrinsic value.
As few of knew , intrinsic value is a characteristic feature of ITM options. But in banknifty weekly expiry , there is a good decay in the intrinsic value of ITM options which in turn affects the pay off chart and buyers are getting losses more than expected in ITM options and sellers are making money in intrinsic value decay.
So how to benefit ITM intrinsic value decay?????
One can create a reverse arbitrage to make profit in banknifty weekly expiry.
Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .
Hi friends. This is girish once again
Implied volatility is one of the factors affecting option premium. Implied
volatility is directly related to the costliness of the option premium. A low IV
indicates options premium are not costly and a high IV indicates options
premium are costly.
But the problem with IV is that there is no exact benchmark for its low and
high value. Different traders have their different benchmarks.
High IV is beneficial for option sellers as they get high premium to short.
Option buyers should keep an eye on IV as high IV is not beneficial for them
since if their trade is opposite, they can suffer huge losses. For them, rising IV is beneficial.
But simply don’t trade on IV basis. Have something to filter your trades accordingly.
Friends i am providing my own views. U please trade as per your own views. Don’t
blindly follow me.
As discussed with few of my students, nifty moved sideways by forming an inside bar pattern and gaved downside break ..
Now around 9500-9550 is a strong support zone .. Also as per option chain , it is acting as a support zone . So, better keep an eye on that zone to check the completion of the ongoing retracement to go bullish again.
Check for bullish signals and confirmation ….
Now the delta of the calls had decreased for those who bought calls on hope earlier without following chart … So, better trade as per chart and option greeks and hedging to play safer…
Also now keep an eye for bullish signals and confirmation ….