Everything we know about automating NIFTY and SENSEX options

Liquidity, settlement, gap risk and event risk all differ, and all four differences point the same way for a strategy that runs unattended.

Premium splits into intrinsic and extrinsic value, and only one of those two survives to expiry. Understanding which is which explains most of what option prices do.

Both are large-cap Indian index options and they are not interchangeable. The differences in exchange, constituents, lot size, expiry schedule and liquidity, and what each means in practice.

The spread is the largest hidden cost in options trading, and it multiplies across legs. How to read it, where it widens, and how much it actually costs a multi-leg strategy.

How open interest is created and destroyed, the four readings of price against change in OI, why it is not support and resistance, and where it genuinely helps.

How the trading day is structured for Indian index options, why the first and last minutes behave differently, and how session structure should shape your entry and exit times.

What moneyness means, how intrinsic and time value split a premium, how the Greeks differ across strikes, and a practical framework for choosing which strike to trade.

Max pain is the strike at which the largest value of options would expire worthless. How it is computed, why the pin theory around it does not hold up, and the limited sense in which it is informative.

How PCR is calculated, the difference between the OI and volume versions, why the usual contrarian reading is weaker than claimed, and the narrow way it is genuinely useful.

How option selling margin is calculated, why it rises with volatility, why a multi-leg position can need more margin mid-assembly than when finished, and how to size with proper headroom.

Why option behaviour changes near expiry — accelerating decay, rising gamma, collapsing vega — what settlement means for an index option, and how to build strategies that account for it.

What implied volatility actually measures, why it differs across strikes, how it moves around events, and the difference between IV being high and options being expensive.

What each Greek measures, how they behave as expiry approaches, why option sellers care about gamma more than delta, and how to read them for a multi-leg position rather than a single option.

A column-by-column guide to the NIFTY and SENSEX option chain — open interest, change in OI, volume, implied volatility and bid-ask spread — and what each one does and does not tell you.

What a lot size is, why the exchange revises it, how to work out what one NIFTY or SENSEX option lot costs, and how lot size quietly changes your position sizing and backtests.