πππ¬π’ππ¬ π¨π πππ«π’π―πππ’π―ππ¬ - πππ«π πππ
Topics covered:
β’ Moneyness of an Option
β’ Intrinsic value & Time value of an option
β’ Why Intrinsic value & time value matters
β’ Implied Volatility
Time for a π§΅
Curated in collaboration with
@AdityaTodmal
Topics covered:
β’ Moneyness of an Option
β’ Intrinsic value & Time value of an option
β’ Why Intrinsic value & time value matters
β’ Implied Volatility
Time for a π§΅
Curated in collaboration with
@AdityaTodmal
β’ Moneyness of Option contract:
β’ ITM option
β’ ATM option
β’ OTM option
β’ ITM option
β’ ATM option
β’ OTM option
β’ Intrinsic Value of an option:
β’ Positive payoff for the buyer
β’ Positive payoff for the buyer
β’ Intrinsic value of ITM CE options = Spot- Strike
β’ Intrinsic value of an:
i) ITM for a CE option: Positive
ii) ATM for a CE option: Zero
β’ Intrinsic value is never Negative
i) ITM for a CE option: Positive
ii) ATM for a CE option: Zero
β’ Intrinsic value is never Negative
β’ Option Chain data representing ATM, OTM & ITM
β’ Example of Intrinsic value of a CE option
β’ Example of Intrinsic value of a PE option
β’ Lets not mess up our heads trying to understand greeks
β’ Lets understand things that are useful for trading
β’ Lets understand things that are useful for trading
β’ Time value is the additional amount over & above Intrinsic value
β’ Options having higher time to expiration has higher Time value
β’ Options having higher time to expiration has higher Time value
β’ How Intrinsic value & Time value helps traders to understand the RR of options
β’ Why OTMs & ATMs have lesser value than ITMs
β’ Logic behind hero ya zero trade
β’ ITM option premium = Intrinsic value +Time value
β’ Implied volatility:
β’ Volatility of a stock over the life of an option
β’ IV impacts to both CE & PE in a similar fashion
β’ Volatility of a stock over the life of an option
β’ IV impacts to both CE & PE in a similar fashion
β’ When does IV rise?
β’ Stock is more volatile
β’ Stock is near to its earnings release
β’ Major events viz. elections, budget etc.
β’ Stock is more volatile
β’ Stock is near to its earnings release
β’ Major events viz. elections, budget etc.
⒠This was a part III 𧡠on derivatives
β’ You can check out the 2nd part here π
β’ You can check out the 2nd part here π
https://twitter.com/niki_poojary/status/1482303125537325056?s=20&t=9r88CzvJMZs9bn37g_9zEQ
If you have missed to check the Part I on Derivatives
β’ You can check out the 1st part here - Basics of Derivativesπ
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β’ Happy learning π€ to everyone!
β’ You can check out the 1st part here - Basics of Derivativesπ
https://twitter.com/niki_poojary/status/1479803623664017414?s=20
β’ If you β€οΈ this, why not share?
β’ π the first tweet and help others find this π§΅
β’ Happy learning π€ to everyone!
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Have & happy & a safeπ·weekend!
β’ If you found this interesting, check out various threads on our profile πβοΈ
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