Optionalysis: How STT Affects Option Prices (Plus, Portfolio Changes)


This is an archive for Capital Mind Premium subscribers, sent on Feb 8, 2014.

A number of options traders start taking positions and hold them too long, and then we have the uniquely Indian situation where options on expiry day could trade below even their intrinsic value! A holder of a Nifty 5,500 call might be surprised to find the option trading at Rs. 495 when the Nifty is at 6,000. This goes against all logic, because the option is supposed to at least have as much value as will be paid out if the option expired right now.

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    • After feedback from Premium subscribers, we’ve decided to not make them public. The posts are valuable in the longer term and subscribers feel they’d get a raw deal if we were to put this data into the public domain. Apologies.

      We will also soon stop trial subscribers access to the archives (from Feb 15). But we’ll create a compendium of some select old posts that will help you evaluate the premium service appropriately. Would you like any specific posts? Can consider that.

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