premium decay enalysis

[Nitin Bhatia]

sir,i have scene your premium decay vedio several times,consept is crestal clear,but how to record it is not getting clear yet for me.basically one confusion is there…..suppose market on monday is at 11500 than 11600 and 11700 ce and 11400 pe and 11300 pe both r otm….and we suppose that all these strike price have highest oi…..now in coming days suppose on wednesday market is at 11600….than now for deacay calculation otm of 11700 ce and 11800ce and 11500 pe and 11400 pe should be considered….question is which premium shold be considered of these strike price….means premium of wedneday minus premium of monday? or as per your vedio premium of wednesday 11400pe minus 11500 pe and 11700 ce minus 11600 ce?

[Nitin Bhatia]

Here the Strike price is fixed. You have to record it against the specific strike price irrespective where the market is right and see the change..If Market is 11500 and your premium for 11600 was Rs 36 and now market is 11300 and premium for same 11600 is Rs 20. It means premium decay is Rs 16.

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