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Old 18th December 2012, 10:48 PM
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Default Calculating Option Prices



Let's say I purchase Nifty Call Option 6000 for Dec series at 40 Rs. Now it is trading at 20. There are 8 trading days more before expiry. At current levels, how do I calculate what level of Nifty (6030?) achieved tomorrow will make the premium higher than 40?

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Old 19th December 2012, 07:21 AM
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You can use Black-Scholes model, but it isn't always accurate.

Option prices are market-driven.

Models can give you a rough idea about what the prices should be, but in the end, option prices are decided by the supply and demand in the market and not any model or formula.
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