assuming mundey is still banned. if you are buying an at the money option with a delta of 0.5 at 100 rupees and you expect the underlying to move 200 points in your favour within 1 week the price is cheap.
though you have a trend bias what if you. are wrong. so you become delta neutral by buying an option opposite to this at 100 rs.
now if the brakeven becomes twice . also the move need to soon other theta will hurt you and both
loose money. you will loose money even if It moves in either of the direction
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though you have a trend bias what if you. are wrong. so you become delta neutral by buying an option opposite to this at 100 rs.
now if the brakeven becomes twice . also the move need to soon other theta will hurt you and both
loose money. you will loose money even if It moves in either of the direction
Sent from my 6043D using Tapatalk