Comment on Open Interest, MaxPain & Put Call Ratio(PCR)
commented on
15 Jun 2016, 04:40 PM
Hi Srinivas,
for ex. if you buy nifty 8100 call option, you will not make any profit until Nifty crosses beyond 8100 + pts equal to your premium cost to make any profit and while you say that 8100 is the resistance which are both contradicting.
If you buy 7800 Call option, the premium is around Rs170 which means that Nifty has to cross 7970 before the expiry and make profit.
In a nutshell look at the time decay of the premium and the volatility and buy the options accordingly when they are bit cheap. Also the duration you hold the options are also very important.