Understanding Option Chain

Call and Put Premium Discrepancy

As a trader, we might have observed that the premium of the call option and put option, which are equidistant from the spot price are not equal. Either the call option is trading at a premium or discount viz a viz put option. The question that comes to our end is why it is happening.

In this video, we will discuss and answer the following 3 questions.

  1. Why the premiums of the equidistant call option and put option are not the same i.e. why one of the options is trading at a premium or discount?
  2. What is the reason for the discrepancy in the premium of a call and put option in this scenario?
  3. If you are using a short straddle or iron condor option strategy then what adjustment do you need to make in your strategy so that you do not incur loss due to this anomaly or maximize your profit 
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BANSI PATEL
BANSI PATEL
2 months ago

HAPPY GURUPURNIMA SIRJI

Ranajib Ghosh
Ranajib Ghosh
2 months ago

Beautifully explained sir.

Mayankkumar Patel
Mayankkumar Patel
2 months ago

But I observed that
1.in weekly expiry future always trade in premium , but not all expiry come on higher side
2.during the monthly expiry , future premium is completely eroded , means spot price and future price are almost same.

Can you explain in these scenario?

DHARMESH GELANI
DHARMESH GELANI
2 months ago

Thank you sir,

Very nicely explained. might be very basic but many of us dint knew this in spite of trading futures and option regularly.

Tarun Ramineedi
Tarun Ramineedi
2 months ago

SIr,Thankyou for the video.Can you please tell what should we use while calculating the IV of options?Futures or spot?

Tarun Ramineedi
Tarun Ramineedi
2 months ago

While doing premium decay analysis,how to remove the effect of intrinsic value?

Tarun Ramineedi
Tarun Ramineedi
2 months ago

Sir,if the futures is in premium and the call option is more than put option,what to conclude?

Avik Mukhopadhyay
Avik Mukhopadhyay
2 months ago

Today future is trading in premium by Rs.8 but put premium of ATM i.e. 24500 is Rs. 15 less (nearly) than call premium instead being greater. Is it an anomaly as expiry is near?

prasannajit mishra
prasannajit mishra
2 months ago

Nitinji, thank you for all recent learning videos.Lets suppose spot is at 20000 and future is at prem 50 points.The big players active in itm( Put)and sometimes in ATM.With big players activity strike price and money flow, currently able to predict direction 60 to 70 points(keeping iv in mind).But, sometimes spot move more than 150/200 points.
Q1 With above example whether one should calculate again from the start fut(prem/disc) together with big players activity and money flow at 20070 to test its further upward/downward movement

Q2-Whats the best mode to invest in index fund SIP/lumpsum.

ASIF KHAN
ASIF KHAN
2 months ago

THANKS SIR.

manoj chaturvedi
manoj chaturvedi
2 months ago

nitin ji, mera sujhaw hai ki websight par ek alag section bna kar daily market analysys ka live stream ya video kar sakte hain… Membership program shuru karne ke liye bhi bola tha uska kya hua……

Tarun Ramineedi
Tarun Ramineedi
1 month ago

Sir,In many videos you explained the option premium movement with respect to the nifty movement.You said that if nifty moves 50 points ,the call also should move 50 points but how is this possible sir.The call or put premium should move according to the delta and iv right?Please explain this once more sir.I am struggling to understand how to correlate premium and market movement.Under ideal conditions how much should the premium move?what is the calculation method?

Sachin Kumar
Sachin Kumar
1 month ago

Pranam Guruji, SSTS 2.0 mea aap Exit kaisea lete hain?

Nilkanth Wable
Nilkanth Wable
1 month ago

Sir, regarding today’s expiry movement 12/09/24, u tweeted that the ATM premium was around 60Rs and that it was unusual.
1. The ATM strike around opening was 25050. Premium of PE was around 96 and CE was 45. So what do you meant by ATM premium being 60 rupees.
2. Why did you say that it was unusual that there was such a big premium (60) in the morning.

Nilkanth Wable
Nilkanth Wable
1 month ago
Reply to  Nitin Bhatia

Last 7 days expiry average meaning the average considered for different indices(the one that has expiry) of last 7 days. Am I interpreting correctly?

Prasannajit
Prasannajit
1 month ago
Reply to  Nitin Bhatia

Can it be analysed on daily basis or only help during expiry days?

prasannajit mishra
prasannajit mishra
15 days ago
Reply to  Nitin Bhatia

Thank you Nitinji.Can it be tested on BankNifty?I know you have said in multiple times you never trade in BankNifty.There are times when Bank nifty shoots up but nifty remain dull for whole day.Just curious to know if you have analysed it on Banknfty.Thank you.

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