How to trade Commodities - Gold, Silver, Crude Oil, Natural Gas

[myamit]

Call selling is better man....avoid selling puts in bear market...
Sell 4800 Call ....that's better...because of fake breakout today...

...markets may fall without warning but almost always rise with warnings.

I agree with what you're saying.

However my thought of selling call & put both is with a view that we do not have view towards market (whether it will go long or short). That is reason we are playing with buystop & sellstop.

So by selling ITM call & put, we earn maximum premium.
If market goes down than sold put would offset with short nifty position & viceversa in case nifty move higher.

However one needs to play this game little longer considering what to do if stops are hit & market is again in the range? However that is the only risk factor now. Probably smaller considering rewards.

Do let me know if I'm making some mistake here.

Regards,

 

[adityasaraf007]

Amit ji...... Just a word of advice.... as suggested by Kamleshji......

Don't sell Puts considering them as Options..... If you wanna sell them..... consider them as Futures instead.... Just saying this because there doesn't seem any reason for markets to hit Upper Circuit..... But there is every possible reason that markets may hit Lower Circuit the day after you sell Puts.... It's been 30 months since last circuit was hit...

PS: I am very eager to watch markets hit circuit..... I haven't seen it till now....

 

[adityasaraf007]

BTW, Crude is hitting circuit for now..... We have a trendline support at 100.67... Beware

 

[adityasaraf007]

Crude - 240min:

Ah...... Looks like a great place to go Long..... Break of Trendline and now a Retest.... Wonderful.....

 

[VJAY]

Where the stop for long now?????

 

[adityasaraf007]

Where the stop for long now?????

I have placed it at 99.54..... just below the top of the cloud... BTW, my long trigger is still pending at 100.67

 

[myamit]

Amit ji...... Just a word of advice.... as suggested by Kamleshji......

Don't sell Puts considering them as Options..... If you wanna sell them..... consider them as Futures instead.... Just saying this because there doesn't seem any reason for markets to hit Upper Circuit..... But there is every possible reason that markets may hit Lower Circuit the day after you sell Puts.... It's been 30 months since last circuit was hit...

PS: I am very eager to watch markets hit circuit..... I haven't seen it till now....

Aditya,

Thank you for word of caution.

I also agree that selling put is as equal to sell future. However major difference is I'm getting a cushion (in terms of premium). Now consider by selling both put & call, we earn approx. 200 points. And by keeping sellstop or buystop, we reverse effect of sold call or put.

Even if makret is going for lower circuit...my sold put combined with sold Nifty future at 4692 will give me loss of 8 points.

Similarly if market goes for upper circuit...my sold call combined with bought Nifty future at 4821 will give me loss of 21 points.

So in any case my profit of 200 points will be given a small dent.

Hope this explais my thoughts. Do let me know if there is something big that I'm missing.

Regards,

 

[adityasaraf007]

Circuit is 10% on Index during early morning...... then 15% & 20%.... look thru nse site for the timings.... If it hits the circuit... you stand to lose and lose big......

 

[myamit]

Circuit is 10% on Index during early morning...... then 15% & 20%.... look thru nse site for the timings.... If it hits the circuit... you stand to lose and lose big......

Thank you for info, Aditya!
I do know circuit filter & was lucky to be on right side when nifty hit upper circuit in 2009.

As you only said... consider sold put as Nifty future. So this will be essential same as sold/bought future.

Just to put everybody's doubt to rest, let me try to explain this again (and also feel free if you think I'm doing somethig wrong)

Monday morning (considering tomorrrow's session is not there)...

1. Sell 4700 Put & 4800 Call...this will yield 180 Rs. or so in premium.
2. At the same time, keep buystop at 4692 & sell stop at 4821
3. If market moves in one side... sold option with future would nullify effect.
4. If range is not broken (and if one fears that market may open with up/down effect as much to circuit levels)... one can hedge this with buying call/put of relevant strike that can be squarred off on next day.

4th point is only for hedging for big gap up/down open.

Note: this is for illustration & discussion only. I'm open to comments. Thanks.

 

[uttamkamlesh]

Why do you say fake breakout ? It is the second day above 21MA on the daily, large volumes, outside bar etc...etc..

for market 4800 is an important level...it attempted to cross it but failed....that is false breakout....Jesse Livermore was fond of selling such failed attempts...