Experimenting with OTM Nifty Options

[jnj333]

Well said...

1. Yes, only explosive moves would help. Considering the current downtrend... I do expect market to stabilize and then move northward... Otherwise the options would surely expire worthless.

2. No I do not expect to make incremental profits on the trades... i.e. not at 6% per month. But whichever month has significant moves, will help me take optimal positions next month. Thus some of the months may surely expire worthless.

3. Appreciate your idea for buying nearer strikes, will surely look into that.

4. I am not comfortable writing options (nakeds or hedges) just because I cannot provide that amount of margin

Also you may need not wait till expiry, you may get some moves in between say Nifty goes to 4500 till 10th , then your 5000 calls may be worth 6 , but it may taper down to 4200 till expiry, so it would be better to book profits when you get your profits, its like stop profits and not thinking afterwards - had I booked profits on 10th sep it would had been better, take whatever the markets gives you and not wait till expiry for that explosive move, some profits are definetly better than all profits or total loss strategy. This is just a suggestion.

I think if you buy lower otm calls first say 4700 and then you sell 5000 calls you may not require the margin as you are already covered with the 4700 calls (kindly check with your broker).

 

[gonifty]

4425.85 is the 50% retrenchment for the very recent high and low.
(4649.85 4201.85)

 

[jnj333]

gonifty, If you have bought your 5000 call at 4 yesterday, right now it is worth 8.5 , with days high at 10, I dont know if you applied your plan or not but if you have gone accordingly i.e bought Rs.15000 worth 5000 call yesterday, 3750 calls, they are worth more than 30000 today, more than 100% jump in one day, 15% of your target of one year acheived in one day, just tell us, did u go with your plan.???? This was THE EXPLOSIVE MOVE of Nifty you were waiting for.

 

[gonifty]

gonifty, If you have bought your 5000 call at 4 yesterday, right now it is worth 8.5 , with days high at 10, I dont know if you applied your plan or not but if you have gone accordingly i.e bought Rs.15000 worth 5000 call yesterday, 3750 calls, they are worth more than 30000 today, more than 100% jump in one day, 15% of your target of one year acheived in one day, just tell us, did u go with your plan.???? This was THE EXPLOSIVE MOVE of Nifty you were waiting for.

Yes they are worth twice today. No I still have only 1500 calls that I had initially brought. I still think that 5075 is on cards because today is has just broken it's first resistance (as per my calculations) of 4425.85.

This is surely a big move, but there still seems to be some upside (look at crude, gold and dow). If (if and if) we see 5075 anytime in this month, then I will exit calls and buy puts (probably OCT), (otherwise hold them till expiry) till then fingers crossed. As I have said jnj, I think this is a calculated gamble.

 

[bandlab2]

this is right time to buy october series 4800 calls

 

[praveen taneja]

this is right time to buy october series 4800 calls

any reason for preferring 4800 calls ??????????????

 

[gonifty]

With a possibility of further downside, it would not be prudent to buy oct calls right now. But since the market is consolidating for last 3 days, I have purchased 4500 Sep Nifty calls. I have updated the spreadsheet.

If Nifty closes above 3961 tomorrow (18-sep), I would be buying oct nifty calls. Otherwise wait the downmove.

 

[praveen taneja]

With a possibility of further downside, it would not be prudent to buy oct calls right now. But since the market is consolidating for last 3 days, I have purchased 4500 Sep Nifty calls. I have updated the spreadsheet.

If Nifty closes above 3961 tomorrow (18-sep), I would be buying oct nifty calls. Otherwise wait the downmove.

oct nifty call of wat value 4500 or 4800 or ???????????????

 

[bandlab2]

whatever you get for 10-15 rs. buy 10 lots and forget. be ready to lose the money. 2500+ brokerage

 

[ajaygodha]

Its better to trade in at the money options.