Now assuming I have bought Bank Nifty’s 18400 Put Option, it would be interesting to observe the P&L behaviour of the Put Option upon its expiry. In the process, we can even make a few generalizations about the behaviour of a Put option’s P&L. 5.3 – Intrinsic Value (IV) of a ...
On the expiry day, the nifty or the bank nifty will usually move towards the max pain level. Causing the buyers maximum loss and seller minimum loss. We believe, the big guys manipulate (I didn’t say that) the index in such a way that index expires very close to max pain level. Ho...