I am an amateur options trader doing Monthly Options trading on Nifty Index options. I have observed that ever since the volatility surge in the markets during the October 2018, the Nifty Index option prices have shot up heavily as shown below and have remained at that level.
How do you explain this kind of surge in option premium ? Are the markets prepping for 2019 elections?
Example:
2018 May 2nd
Index Close 10718.
Days to expiry - 29
NIFTY MAY 31 2018 10700 CE PRICE 160
NIFTY MAY 31 2018 10700 PE PRICE 120
2019 January 1
Index Close 10910
Days to Expiry - 30
NIFTY JAN 31 2019 10900 CE PRICE 210
NIFTY JAN 31 2019 10900 PE PRICE 150
How do you explain this kind of surge in option premium ? Are the markets prepping for 2019 elections?
Example:
2018 May 2nd
Index Close 10718.
Days to expiry - 29
NIFTY MAY 31 2018 10700 CE PRICE 160
NIFTY MAY 31 2018 10700 PE PRICE 120
2019 January 1
Index Close 10910
Days to Expiry - 30
NIFTY JAN 31 2019 10900 CE PRICE 210
NIFTY JAN 31 2019 10900 PE PRICE 150