Don't worry about the market,Earn regardless of where the market goes !!

[arnav_rulz]

arnav,

Should the investment be not Rs.1000 instead of Rs.2000 as you have mentioned-

Buy 1 put of 4400 @ 250 Premium payable-12500
Sell 2 Puts of 4100 @ (120*2)240 Premium received-12000
Net Payable - 500 (a)


Buy 1 put of 3900 @ 65 Premium payable -3250
Sell 2 Puts of 3600 @ 55(27.5*2) Premium received -2750
Net Payable - 500 (b)

(a) + (b) = 500 + 500 = Rs.1000

Kindly clearify,
regards
jnj

Yaya you are right actually. But i usually trade like buy 100 Put & sell 200 Puts (making the calculation easy) thus making the investment twice.

Srry for not clarifing that...

 

[jnj333]

Yaya you are right actually. But i usually trade like buy 100 Put & sell 200 Puts (making the calculation easy) thus making the investment twice.

Srry for not clarifing that...

Thanks for the prompt reply. Keep up the good work.

 

[kapil1301]

Hi Arnav,

I have one query regarding options...............
Is their any direct relation between the Nifty value and its premium (in call and put).

for example suppose at 4400 the premium is 200 then can we find what it will be at 4300 and at 4200.

i have just started reading docs on options so dont know if this is a silly question.............can u please explain.............

 

[arnav_rulz]

Hi Arnav,

I have one query regarding options...............
Is their any direct relation between the Nifty value and its premium (in call and put).

for example suppose at 4400 the premium is 200 then can we find what it will be at 4300 and at 4200.

i have just started reading docs on options so dont know if this is a silly question.............can u please explain.............

Im srry but i dont think i got your question properly.

Still Let me give an example about premium of CAlls and Puts...



Suppose Nifty (In futures not cash) is trading @ 4300 @ the start of the month then premium on call of 4300 would be around 150-170 generally & premium of 4400 call would be around say 100-110

If nifty goes to 4400 then premium of 4300 call would be around 210-220 & of 4400 call around 160...


Premium is Never fixed, It all depends on Demand and supply and it keeps decreasing as time goes by.

 

[arnav_rulz]

Extra Info:

Many People Who trade in Puts & Calls generally dont realise 1 thing...


CALL is SAME AS PUT.

Its never that puts have more premium(than calls) during a bear market and calls have more premium(than Puts) in Bull market.


Generally ppl tend to buy a stock/nifty say @ 4100 and sell its 4200 Call, Whereas what they are simply doing is Selling a Put of 4200 !!

Buying a Future(Y price) + selling a Call(X strike price) = Selling a Put(of X strike Price)

Similarly

Selling a Future(Y price) + Buying a Call(X strike price) = Buying a Put(of X strike Price)

Buying aFuture(Y price) + Buying a Put(X strike price) = Buying a Call(of X strike Price)

 

[nagendra_gb]

Arnav..

Any setup for today...

 

[arnav_rulz]

Arnav..

Any setup for today...

Sorry Sir i Dont given intraday calls on Options here.


Here i make strategies which you have to hold till expiry to reap the benefits..

 

[arnav_rulz]

Generally ppl tend to buy a stock/nifty say @ 4100 and sell its 4200 Call, Whereas what they are simply doing is Selling a Put of 4200 !!

Buying a Future(Y price) + selling a Call(X strike price) = Selling a Put(of X strike Price)

Similarly

Selling a Future(Y price) + Buying a Call(X strike price) = Buying a Put(of X strike Price)

Buying aFuture(Y price) + Buying a Put(X strike price) = Buying a Call(of X strike Price)

**If say Nifty Future is @ 4000 and 4200 Call is @Rs 50 then 4200 Put has to be @ 250,

If Put is more than 250 then...

Sell the Put , Buy the Call & sell the Future ( and there and there @ the mont

 

[kapil1301]

**BUY 100 PUT Of Nifty(4100) @ 270

**Sell 200 Put of Nifty(3800) @ 250


* Total Investment, 2000 Rs, Loss after Nifty goes belows 3500 in current Month(July). You Earn @ any close between 3500-4100 but do not lose above close of 4100.

** Buy 50 CALLS of Nifty(4000) @ 160

*Total Investment Rs. 8000, Upside Unlimited.... You just lose your investment on close of below 4000, which you would recover from your Puts...



Hi,

Arnav thanks a lot for the reply.
Actaully i asked this question becz uptill now what i have understood abt options ...and ur reply is that we cannot determine in advance absolute value of premium at any particular level of NIFTY.(we can find range like (210-220)

so suppose according to ur strategy if i place a bid and 2 out of the three bid matches then ???????


Also one more question if we are not sure whether the market will go (up or down) but we are sure for a major move then is it a good strategy..........


buy a put and buy a call...
for example in case of august buy a put at 3800 @27
buy a call at 4800@34


I am just at the learning stage and doing paper trading so please
dont get irritated by my questions

Thanks and Regards,
Kapil Gupta

 

[arnav_rulz]

Dear Kapil, About the 1st question....

suppose according to ur strategy if i place a bid and 2 out of the three bid matches then ???????

The prices i gave in my strategy were the prices which were being traded @ that time so you would def. easily get all ur 3 bids traded As Nifty Calls & Puts are very actively traded.

buy a put and buy a call...
for example in case of august buy a put at 3800 @27
buy a call at 4800@34

Yeah this strategy is good if your sure about a Strong Movement of any 1 side.

But any close btw 4800-3800 You lose 6000 Bucks & only only gain If the Close is Above 4860 or below 3740.


Usually i do not prefer this strategy as the time frame is too short to predict such a steep rise or fall.

Also during Volitile Time or anytime a strong news is about to come, the premiums are too high and chances of your earning are quiet low.


cheers