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Let us assume that spot value of stock market index is 5670. Out of money call option for the strike price 5800 is trading at $8.15. Out of money put option for the strike price 5600 is trading at $24.How to calculate probability of stock market index going up or down?
Hi,
When I entered these values in my index trend finder widget, it gave me answer as follows:
Probability of going up is 42.26% and probability of going down is 57.75%
Are these both the answers correct? And if correct can any member of this forum explain me a little bit logic behind it?
Thanks.
Hi,
When I calculated it manually, my answer for probability of index going up is 40.35% and going down is 59.65% Why there is a difference between my answer and index trend calculator's answer.
Any reply from any member of this forum pertaining to this topic is appreciated.
Okay,