๐๐š๐ฌ๐ข๐œ๐ฌ ๐จ๐Ÿ ๐ƒ๐ž๐ซ๐ข๐ฏ๐š๐ญ๐ข๐ฏ๐ž๐ฌ - ๐๐š๐ซ๐ญ ๐ˆ๐ˆ๐ˆ

Topics covered:

โ€ข Moneyness of an Option

โ€ข Intrinsic value & Time value of an option

โ€ข Why Intrinsic value & time value matters

โ€ข Implied Volatility

Time for a ๐Ÿงต

Curated in collaboration with
@AdityaTodmal

โ€ข Moneyness of Option contract:
โ€ข ITM option
โ€ข ATM option
โ€ข OTM option
โ€ข Intrinsic Value of an option:
โ€ข Positive payoff for the buyer
โ€ข Intrinsic value of ITM CE options = Spot- Strike
โ€ข Intrinsic value of an:
i) ITM for a CE option: Positive
ii) ATM for a CE option: Zero
โ€ข Intrinsic value is never Negative
โ€ข Option Chain data representing ATM, OTM & ITM
โ€ข Example of Intrinsic value of a CE option
โ€ข Example of Intrinsic value of a PE option
โ€ข Lets not mess up our heads trying to understand greeks
โ€ข Lets understand things that are useful for trading
โ€ข Time value is the additional amount over & above Intrinsic value
โ€ข Options having higher time to expiration has higher Time value
โ€ข How Intrinsic value & Time value helps traders to understand the RR of options
โ€ข Why OTMs & ATMs have lesser value than ITMs
โ€ข Logic behind hero ya zero trade
โ€ข ITM option premium = Intrinsic value +Time value
โ€ข Implied volatility:
โ€ข Volatility of a stock over the life of an option
โ€ข IV impacts to both CE & PE in a similar fashion
โ€ข When does IV rise?
โ€ข Stock is more volatile
โ€ข Stock is near to its earnings release
โ€ข Major events viz. elections, budget etc.
โ€ข This was a part III ๐Ÿงต on derivatives

โ€ข You can check out the 2nd part here ๐Ÿ‘‡
https://t.co/7ig3QsfWkc
If you have missed to check the Part I on Derivatives

โ€ข You can check out the 1st part here - Basics of Derivatives๐Ÿ‘‡
https://t.co/j3tYdNITDZ

โ€ข If you โค๏ธ this, why not share?

โ€ข ๐Ÿ” the first tweet and help others find this ๐Ÿงต

โ€ข Happy learning ๐Ÿค“ to everyone!
โ€ข I curate threads on trading & finance ๐Ÿ“Š๐Ÿค‘

โ€ข If you found this interesting, check out various threads on our profile ๐Ÿ˜€โœŒ๏ธ

Follow us:

@AdityaTodmal

&

@niki_poojary

for more such interesting Threads!๐Ÿงต

Have & happy & a safe๐Ÿ˜ทweekend!

More from Nikita Poojary

More from All

๐™Ž๐™๐™–๐™ง๐™ž๐™ฃ๐™œ ๐™ข๐™ฎ ๐™ฌ๐™ž๐™จ๐™™๐™ค๐™ข ๐‘พ๐’๐’'๐’• ๐’ƒ๐’† ๐’”๐’–๐’“๐’‘๐’“๐’Š๐’”๐’†๐’… ๐’Š๐’‡ ๐’•๐’๐’Ž๐’๐’“๐’“๐’๐’˜ ๐’– ๐’“๐’†๐’‚๐’… ๐’•๐’‰๐’† ๐’”๐’‚๐’Ž๐’† ๐’”๐’•๐’–๐’‡๐’‡ ๐’Š๐’ 50๐’Œ ๐’˜๐’๐’“๐’Œ๐’”๐’‰๐’๐’‘ ๐’๐’“ ๐’”๐’๐’Ž๐’†๐’๐’๐’† ๐’Ž๐’‚๐’๐’‚๐’ˆ๐’Š๐’๐’ˆ ๐’š๐’๐’–๐’“ ๐’Ž๐’๐’๐’†๐’š ๐’˜๐’Š๐’•๐’‰ ๐’”๐’‚๐’Ž๐’† ๐’๐’๐’ˆ๐’Š๐’„
Simple and effective way 2 make Money


Idea 1:- Use pivot level like 14800 in case of nifty and sell 14800straddle monthly expiry (365+335) exit if nifty closes on daily basis below S1 or above R1

After closing below S1 if it closes above S1 next day or any day enter the same position again vice versa for R1

Idea2:- Use R1 and S1 corresponding strikes multiple
Incase of R1 15337 take 15300ce
N in case of S1 14221 use 14200pe
Sell both and hold till expiry or exit if nifty closes below S1 or above R1 around closing
If the same bounces above S1 and falls below R1 re-enfer same strikes

Use same criteria for nifty, usdinr and banknifty

(This is must)Use this margin rule for 1lot banknifty pair keep 4Lax margin
For nifty one lot keep 3Lax
For usdinr 100lots keep 4Lax

I bet you if you do this on consistent basis your ROI will be more than 70% on yearly basis.

Couldn't explain easier than this

Criticisms are most welcomed.
APIs in general are so powerful.

Best 5 public APIs you can use to build your next project:

1. Number Verification API

A RESTful JSON API for national and international phone number validation.

๐Ÿ”—
https://t.co/fzBmCMFdIj


2. OpenAI API

ChatGPT is an outstanding tool. Build your own API applications with OpenAI API.

๐Ÿ”— https://t.co/TVnTciMpML


3. Currency Data API

Currency Data API provides a simple REST API with real-time and historical exchange rates for 168 world currencies

๐Ÿ”— https://t.co/TRj35IUUec


4. Weather API

Real-Time & historical world weather data API.

Retrieve instant, accurate weather information for
any location in the world in lightweight JSON format.

๐Ÿ”— https://t.co/DCY8kXqVIK

You May Also Like