when to purchase an option and how to conclude the selling price of an option is an inquiry posed by a large portion of the option brokers. numerous options act like future as they get their worth from future itself yet the result of future of nifty and banknifty is linear and their options are non linear.
to comprehend this their options greeks should be determined. option greeks are:
delta of CE option
Delta of PE option
Vega of CE option
Vega of PE option
Theta of CE option
Theta of PE option
Gamma of CE option
Gamma of PE option
today we are examining delta. delta is a greek which tells an option purchaser that on the off chance that market heads down his path , per 100 focuses move in banknifty can delivery or increment the option premium by this much. so it will be from – 1 to +1 since, in such a case that the option strike become ATM from OTM, the price is expanded and once it turns out to be profound ITM the option price moves like future and the prizes are like future.
same way for a dealer of option on the off chance that he had sold the option and the price began showing negative worth over 100 percent the time is to hedge by halting the further misfortunes or shutting the situation in misfortune.