Comment on Say Hello to The Greeks!

Karthik Rangappa commented on 23 Aug 2014, 11:41 AM

Dear Anantha,

You are trying to trade a OTM option (1040CE) when we have just one more week to expiry. This is may not have a good impact on your P&L for reasons mentioned in this article. Do refer the theta section in the article.

Instead I would suggest you trade the 1000 CE option as it has a better chance of being profitable (of course this is assuming your bullish call on Reliance is accurate). Also, While buying option in the 2nd half of the series do bear in mind that the effect of Theta will start to accelerate.

Volumes always tend to be higher for a ATM option, hence 1000CE will have better volumes, and therefore better liquidity.

Good luck.

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