Thank you for your kind reply sir...
yes...Bank nifty is the best instrument to trade... and thanx for the GAIL Example..i got clear idea on liquidity instrument to be taken into... //*thumbs up*//
and sir i want clarity on "The Role of Greek in the Premium price and aggressive market orders... How does market order and greeks interact???
Aggressive orders make the tick and greeks tell you the measured move of the tick with parameters like delta,gamma & vega...??
Coming back to your query regarding interaction between "executing big aggressive orders" and "role of Greeks" ....
I will be frank with you, banknifty and it's contracts are just TOO BIG an instrument to be impacted by big aggressive orders. Yes, initiating big aggressive orders can surely impact penny stocks or other illiquid scrips but surely not something as huge as banknifty FNO contracts. In order to do that, we need to be as big as FII or DII. Yes, there are days when the price of different banknifty weekly option contracts look abnormally high or low. But these tactics cannot hold the artificial price level for too long. Option Greeks will surely come into play to alter the price of that contract.
But yes, I have myself witnessed some big orders affecting penny stocks. It shouldn't come as a surprise because we all know that penny stocks are highly manipulated.
Anyway, to put it in short, option greeks will surely play it's part in determining value of various option contracts. In the longer run, they usually will not get affected by the heavy buy or sell orders.
Also, to add one more thing, one small hint or trick to determine when the big move is about to come is that just before a big move (in banknifty calls or puts), the spread of those calls (if in case banknifty is about to jump) or puts (if in case banknifty is about to slip) will start shrinking all of a sudden. That means that the difference between buyer's bid and seller's bid will start to diminish. And when they almost reach very near to each other, then you will suddenly notice that the price of that particular option contract will start jumping abruptly or fall at a quick pace.
Disclaimer: This forum is meant for educational purposes only.