re: Day trading Nifty & Banknifty Futures
Vertigo,Nirav and traderravi bhai, please keep up the topic. It is very good to see one concept from different perspectives. It helps us all to understand the core concept in a better way.
I am myself new in Options Trading, so cannot say much. But I agree with observations of Nirav bhai, as what I have noticed so far is that high IV " it is relative term - what is high IV for Nifty could be low IV for Adani Group stocks and so on" is an added risk for the option buyers. Therefor before buying the options, one must definitely look at the IV values and if possible then compare these values with their recent past values. If the IV is too high, then the trade should be taken only if you have great conviction that your trade Direction and Timing are good for such trade. If you have any doubt, then it is better to skip this trade and wait for better opportunities.
I agree with points of Vertigo bhai as well. We cannot completely generalize this situation like this "High IV = Definite Loss for Option Buyers". As there are opportunities for money making if one has the experience to chose proper strike and price levels in such situation.
traderravi bhai comments are spot on as he is speaking from his true experience of past many years. OTM options have speeds similar to Formula 1 Race Cars ! They are just too quick. If one can get it right, then there is no faster way to make money, but as ravi bhai said, most often one ends up on the loosing side only.
Please carry on discussion about practical aspects of options trading, all of you. It is a great help for the guys who are learning options. :thumb:
With my best regards.
i didnt mean to say that money couldn't be made at all .... However, with inflated ivs, its not a buyers mkt. Its a sellers market.
My post was primarily meant for guys who buy and hold options for a larger swing pre event.
This is vix from jan 2014 till date. A simple eye ball mk1 analysis tells us that pre events, its been a sellers mkt on nf options ....
My post was primarily meant for guys who buy and hold options for a larger swing pre event.
This is vix from jan 2014 till date. A simple eye ball mk1 analysis tells us that pre events, its been a sellers mkt on nf options ....
falling vix biggest enemy of option buyers , specially otm options loose premium very fast.
If you want to make quick money from naked options intraday (not buy & hold type) :
1) your direction sud be right , market must not move opposite as options lose value very fast so sl hit etc.
2) market sud reach your target quickly otherwise again option will start losing value.
3) both these points cant be right always => you will gain once in a while but lose money mostly.(4 years experience doing this , still doing same
)
on friday, 7300 pe was at 39 when nf hit 7514, again after some time it was at 39 when nf @ 7497 , later it was at 39 when nf at 7480 :annoyed:
If you want to make quick money from naked options intraday (not buy & hold type) :
1) your direction sud be right , market must not move opposite as options lose value very fast so sl hit etc.
2) market sud reach your target quickly otherwise again option will start losing value.
3) both these points cant be right always => you will gain once in a while but lose money mostly.(4 years experience doing this , still doing same
)on friday, 7300 pe was at 39 when nf hit 7514, again after some time it was at 39 when nf @ 7497 , later it was at 39 when nf at 7480 :annoyed:
I am myself new in Options Trading, so cannot say much. But I agree with observations of Nirav bhai, as what I have noticed so far is that high IV " it is relative term - what is high IV for Nifty could be low IV for Adani Group stocks and so on" is an added risk for the option buyers. Therefor before buying the options, one must definitely look at the IV values and if possible then compare these values with their recent past values. If the IV is too high, then the trade should be taken only if you have great conviction that your trade Direction and Timing are good for such trade. If you have any doubt, then it is better to skip this trade and wait for better opportunities.
I agree with points of Vertigo bhai as well. We cannot completely generalize this situation like this "High IV = Definite Loss for Option Buyers". As there are opportunities for money making if one has the experience to chose proper strike and price levels in such situation.
traderravi bhai comments are spot on as he is speaking from his true experience of past many years. OTM options have speeds similar to Formula 1 Race Cars ! They are just too quick. If one can get it right, then there is no faster way to make money, but as ravi bhai said, most often one ends up on the loosing side only.
Please carry on discussion about practical aspects of options trading, all of you. It is a great help for the guys who are learning options. :thumb:
With my best regards.
