my options picks intraday/delivery

[DanPickUp]

Hi Danpickup ,I have few questions to you.
1) One should buy option if therotical value is less than actual price.Is it ok?
2) what about implied volatility? Is it that IV should be less than Historical volatility?
3) Have you used Option Oracle software?

Hi hawaisanjay

I hope, I understood your question right.

1 : Here you speak about Implied volatility. If you can manage, to find options in your home markets, which are under valued, it can be sign to buy.

Even than, only buy when it fixes the other market conditions. If the market has for a longer time a falling IMV, be careful. Market could get even quieter and then you would have bought it at the wrong moment.

I know persons, which every day scan 60 different markets for over and under priced options. They have special software to do so.

2 : In conjunction to what ?

3 : I had a lock at it. I think, it does his work. I personal use OpVue 6 and I have my private sheet for future and option strategies, which are not possible to test with option oracle, as I only can test pure option strategies with option oracle.

Take care

DanPickUp

 

[hawaisanjay]

Hi hawaisanjay

I hope, I understood your question right.

1 : Here you speak about Implied volatility. If you can manage, to find options in your home markets, which are under valued, it can be sign to buy.

Even than, only buy when it fixes the other market conditions. If the market has for a longer time a falling IMV, be careful. Market could get even quieter and then you would have bought it at the wrong moment.

I know persons, which every day scan 60 different markets for over and under priced options. They have special software to do so.

2 : In conjunction to what ?

3 : I had a lock at it. I think, it does his work. I personal use OpVue 6 and I have my private sheet for future and option strategies, which are not possible to test with option oracle, as I only can test pure option strategies with option oracle.

Take care

DanPickUp

Hi Dan thanks for reply.I still have following queries:
1.I was talking about therotical price shown by option calculator of option price.com.When should be bought? Is it when therotical price is less than actual price?
2.In option oracle we can see IV and HV.When should be a call or put bought? Is it when IV is less than HV? But actually I never seen that IV is less than HV.
3.In option oracle there is volatility cone.How to use that? Is that one should choose call or put closer to mean deviation line?

 

[DanPickUp]

Hi Dan thanks for reply.I still have following queries:
1.I was talking about therotical price shown by option calculator of option price.com.When should be bought? Is it when therotical price is less than actual price?
2.In option oracle we can see IV and HV.When should be a call or put bought? Is it when IV is less than HV? But actually I never seen that IV is less than HV.
3.In option oracle there is volatility cone.How to use that? Is that one should choose call or put closer to mean deviation line?

Hi hawaisanjay

By the way, happy Diwali and all the best in your future.

Now to your post. I do not know, how much knowledge you have in option trading. Is it possible for you to give some more lights on that ?

- The first question is already answered with my comments about the IV. IV and time are the main reasons, when there is a miss balancing between theoretical price and market price. There is always a reason, why there is a miss balance and you have to recognize this reason and not only one fact, that the th price is may lower or to high compare to the market price.

In any of your personal decision processes to buy or sell an option, you must include different facts and not only one. You have to make a whole picture of the situation. If you now in this process come to the point, that you want to buy a certain option, because of the fact that the price of the option has a miss balance to the market price, it has to be in relation to this whole picture and not only on this one specific fact. If the th price of the option is less than the market price, it may is a sign to buy, when it stands in relation to the whole picture ! Clear ?

- Now to your second question : Here again. Your decision process must be attached to the whole picture and not only on this one fact, that IV may is higher or lower than HV and market may turns that way and now it is better to buy a put and not a call.

- Third question : I am not clear about what you mean with that. As I do not use this software, I may would give a wrong answer. In my software, I use it to change the volatility and to see, how my analyze picture is changing. It helps me to see changes on the break even or when I fall under the zero line, which is always risky.

Finally : I will give here an example and you can train your self with a decision making process.

Example : Today is Friday. Market stays in a range from 100 to 120 since four weeks. It usually took the market nine days to move from support to resistance, as the IV is less than HV. We see, that the call 125 is slightly undervalued and has a rest live of 10 days. Market is at the moment again by support of 100 and there is no sign of any fundamental or market specific data, which could have a bigger impact in to the market for the next few day.

A : Would you now buy this call, because of its miss balance between the th price and the market price ?
B : Would you may even buy a put, because of the low IV ?

Post your answer, if you want.

Take care

DanPickUp

 

[RAGHUERK]

Hi Dan,

Wish you a happy and prosperous deepawali.

Regards,

RAGHUERK

 

[hawaisanjay]

Hi Dan..Thank you very much for detail reply.Wish you happy Diwali.I am new to options and is in the learning phase.Coming back to your question,I can't answer these questions because of lack of knowledge of IV,HV and therotical value.But practical answer will be I will buy a call if price crosses 120 with volume.Correct me If I am wrong.

 

[DanPickUp]

Hi Dan..Thank you very much for detail reply.Wish you happy Diwali.I am new to options and is in the learning phase.Coming back to your question,I can't answer these questions because of lack of knowledge of IV,HV and therotical value.But practical answer will be I will buy a call if price crosses 120 with volume.Correct me If I am wrong.

Hi hawaisanjay

If you trade only on such kind of decision, I urgently recommend you not to trade options. That is like crossing an intersection with oncoming traffic and checking only one direction.

Watch around in the forum and make a cross on your table each time you see a post, where some body ask for help, as they are in troubles with there option positions by jumping in the market build on decisions like your example.

Stay in the forum and take your time to read about options and the greeks as much as you can.

I give you here a link and in the future you follow this thread. Use what I post there and learn with it.

http://www.traderji.com/options/305...g-strategy-option-spreads-128.html#post482797

See you there and take care

DanPickUp

 

[hawaisanjay]

Hi Dan ..thanks again...I have traded options so far Only few times and with others suggestions.I wish learn and then only I will trade.Hope you will help me out.Suggest me some books( ebooks will also do)/links.I will go thru the thread which you have mentioned.Thanks

 

[option fan]

exited suzlon calls......
@ 1.75

no call holdings now

Bought 6300 PE NOV @ 88 expecting 108-130-156

HAPPY DIWALI !!

see ya friends on monday!

 

[timepass]

exited suzlon calls......
@ 1.75

no call holdings now

Bought 6300 PE NOV @ 88 expecting 108-130-156

HAPPY DIWALI !!

see ya friends on monday!

Great minds think alike .. I purchased 6200 puts @52.25 .. expecting 60/65 .. I am new to this so quite timid ...

Happy Diwali :thumb:

 

[DanPickUp]

NIFTY 6300 CE cmp is 107( theoritical value is 116 , if you count days from today)....but if days calculated are based on monday 8th nov...due to long weekend ....so its rightly priced..

Hy buddy

I think, this post is not so fair, as it is build up on this post :

http://www.traderji.com/beginners-guide/39632-come-into-traders-den-59.html#post483605

Why not give the source of your post as I do it always with the respect to the owner of the real thoughts ?

Even than : All the best for Diwali and I wish you every thing you wish to me.

Take care

DanPickUp