When an option buyer enters the market, he simply wants to identify the trend. In most cases, there are two reason behind this thought process. First, the option buyer want to determine whether he should buy a call or a …
It is a common practice amongst option traders to depend on charts to determine the trend and then buy or sell options. However, we know how difficult this technique is in determining the strike and then identifying the entry or …
Of all the different methods that are used to evaluate the fair value of an option premium, neutralizing the volatility premium provides the strongest edge. The obvious question is why? First, volatility does not follow any historical reference point. The …
Since option premiums derive their values from the movement of the underlying instrument, adjusting the market volatility is extremely essential when market uncertainty drives India Vix to levels of 72.Take for example today’s situation. Nifty opened 300 points gap down at …
India VIX is an index that reflects the volatility in the Indian markets. In today’s article we shall discuss how volatility can be used to understand the behaviour of option premiums. First let us understand how Vix functions. How India …
India’s benchmark Nifty witnessed a catastrophic fall of 4000 points from the recent high of 12418. In today’s session, Nifty Futures crashed to a low of 8299 in the first 20 minutes of trade. The unprecedented collapse in the past …
Over the last week Nifty has plunged 857 points from its high of 11889 and had registered a low of 11023 yesterday. The surprise fall has triggered excessive intraday Volatility and has been the primary cause behind the exponential rise …
In today’s article we shall discuss why Nifty Futures failed to capitalize on the sharp upside rally of 90 points triggered in the first hour of trade. We shall also showcase how mispricing in Call options played a vital role …
Since our last article on “How Hedge Funds Trade Options”, Nifty has registered fresh highs on three different occasions but has failed to sustain the buying momentum. The most recent one being yesterday. Most of us want to know why? …
At the hedge fund level, options’ trading is about correlating the drift in market volatility with the magnitude of theta decay. At the retail level, the story is always, “I follow the charts very closely then predict the market. Still …