How bank nifty option Premium changes
eswar reddy (16 Points)
26 June 2022eswar reddy (16 Points)
26 June 2022
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 27 June 2022
Eswar Reddy S
(CFO- at NHTF)
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Replied 27 June 2022
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 28 June 2022
Eswar Reddy S
(CFO- at NHTF)
(58270 Points)
Replied 28 June 2022
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 28 June 2022
Fahad Shakeel
(Head)
(220 Points)
Replied 04 October 2022
A few key factors affect the options premium, including the Bank Nifty option premium. The first factor is the underlying asset's price, which in this case would be the Bank Nifty price. Suppose Bank Nifty is on an uptrend. More option buyers will buy Bank Nifty calls. Hence, due to more demand, the premium there increases. If the strike price is near the asset's current value, the premium change will be more significant.
The second main factor that affects the option premium is the time to expiration of the options contract. Options contracts trade until they expire, so the premium falls as we approach the expiry date. That is the case for both calls and puts, and the phenomenon is called time decay.
The third factor is the underlying asset's volatility, which is the degree to which the price moves. Both the historical volatility and the implied volatility (forecasted volatility) is considered here. Generally, highly volatile assets have higher premiums. If you wish to learn more about options trading, consider going through IIFL Securities' knowledge center.
For more information visit:- https://www.indiainfoline.com/nifty-50