Nifty Futures Trading

[Sunil]

settlement close will be in red...
outside day is already confirmed as per fut chart...

even yesterday, as per exchange (but not as per charts), SPot's low was 3056!!!

 

[learn2trade08]

dear sunil,
oops sorry,read it wrong was a good move divergence.

i loved it after a long time.

btw sunil,have u worked on momentum indicator.i am curious as it looks good.

oh boy...

after a long time, seeing this "to hell & back" move...
!!!

i did not participate in this upmove...
koi baat nahin...
was a good learning experience for RSI regular divergences...
thanks again to Asish Da & L2T

 

[Sunil]

If it closes in red, it's gonna be a bearish engulfing bar in EOD charts...
ie an outside bar, with today's high & low being key momentum levels for tomorrow

settlement close will be in red...
outside day is already confirmed as per fut chart...

even yesterday, as per exchange (but not as per charts), SPot's low was 3056!!!

closed at 3112.80 (-8pts)
FUT too may close in red marginally...

Spot's EOD charts will show two common LODs - 3056
Fut's EOD charts will show bearish engulfing bar (outside bar) with "breaking views" (not breaking news) levels at today's HOD & LOD
In 30min/60min charts, today's LOD FUT 3057 become trend/trade reversal levels.

So, well-defined range for positional trades too...

 

[Sunil]

closed at 3112.80 (-8pts)
FUT too may close in red marginally...

Spot's EOD charts will show two common LODs - 3056
Fut's EOD charts will show bearish engulfing bar (outside bar) with "breaking views" (not breaking news) levels at today's HOD & LOD
In 30min/60min charts, today's LOD FUT 3057 become trend/trade reversal levels.

So, well-defined range for positional trades too...

Lows important for saving this pattern:

anyone ready to sip some chai in the coming days??

L2T,
If Spot 3110 breaks & hits 3240, then meet me at Barista
)


PS: this is what i was trying to figure out as per my morning post... join the LODs from 2250 too for another TL...
what do figure out of this pattern...

sort of triangular pattern, which broke out yesterday...
spot's common low of 3056 becomes crucial for this pattern

 

[uasish]

arnav,

Kindly elaborate your views on Shorting Calls or Put to the Library thread.

Asish

 

[Sunil]

today giraff wil become camel

sahi jawaab !!!
;-))

"hairy neck" & "humps" are perfectly matching!!!





while our giraffe was mocking us away

 

[TrendPlayer]

Spot closes above 3110 @ 3121.45 on settlement basis....
A new higher high has been recorded for EOD charts


and just to analyse:
Fut from 3085 to 3138 = 53
Call 3100 from 115 to 139 = 24
Put 3100 from 127 to 101 = 26

So, hedges cost the same...

Just for analysis:

6th Jan 2009 EOD:

Fut long from 3085 to 3133 = +48
1. Sold, Call 3100 from 115 to 97 = +18
2. Bought, Put 3100 from 127 to 132 = +5

 

[MINITRADER99]

No Sunil... The hedges dont actually cost the same ...
They are looking the similar because the time frame is very small and also the rise/fall in nifty is also not that big...

See your question was ..


Well both are advisable ... but depending on the your frame of mind ...

the Basic Thing states that if you foresee a sharp rise/fall then Buying the Put is advisable .. but if you believe there will be some consolidation then Selling the Call is better ...

But this is not enough... We should go deeper than this basic..
As For my advice ... Check out 2 things ...

1)Supports and resistances and
2)Even more Important is your Time Frame..

First Coming to Time Frame ...
A)If your time frame is 5 or less days ... Buying the Put is better Anyday especially if your far from expiry ...

This is because i am taking an assumption that in 5 days the time value of Options wont decrease..

Now why is Buying the Put better... lets take an example
Nifty is @ 3000
Put 3000 = 150
Call 3000 = 150

1)Now Taking that Nifty is same after 5 days... then after 5 days the Rates of call and put will remain the same thus there is no difference...

2)Now If after 5 days say nifty falls/rises only a small amount .. say 3100/2900...
Even now @ 3100 Call would trade somewhere around 200 whereas the Put will be somewhere around 95... So again not a big difference ..
Similarly @ 2900 Put will be 205 and call will be 100... So no difference agn.


3)BUT if there is A big move Up/Down ... Now Put will be far better ..
Say nifty = 3200/2800
@ nifty = 3200, the 3000 Call will trade at atleast 275(you lose 125) whereas even if the 3000 Put trades @ 75 then you lose only 75 , thus you save atleast 50.. And you keep loosing more(in case of call..) as nifty rises..
Even @ 2800... say your call trades @ 70 (you gain 80) whereas your Put will trade somewhere near 270(you gain 120) thus Put is better and it will earn more as Nifty falls more...

Thus IMO if your Time period is Short(even for intraday) Buying the Option is anyday better and selling the Opposite Option.


B)Now if say your Time period Is Say Larger ... Here My advise is Generally to Sell the option ONLY IF you are NOT Expecting a VERY Sharp rise/fall..

Again We will take an example and Say ... Our time frame is Expiry (for easier Calculation)
Nifty 3000
Call 3000 = 150
Put 3000 = 150

Now again the 3 same conditions...
1)Nifty is @ 3000 on expiry ... Clearly you gain 150 If you sold the call and will lose 150 if you Brought the Put ..(thus a 300 Point advantage for the call)

2)Nifty is @ 3100 on expiry.. You gain 50 from call but lose your 150 in Put ... So Again Call is better ..

3)Nifty @ 3300 .. You lose 150 in Call But you would have lost the same amount if you sold the Put So no Difference in buying/selling the call..

Thus only above 3300 and below 2700 (similar example) the Put is Better Than Call... So My advise .. Sell an Option rather than Buy an opposite Option When you have a bigger Time frame



Now another reason i say that Bigger time frame and selling in Option is better is a becaz of Combination Of both Supports and Resistance with it ..

Again Say taking the Present Senario ...
Nifty is trading @ 3100
Call = 150
Put = 150

Strong Resistance = 3250
Strong Support = 2800-2900 ?

Now When We Combine Both the Charts and Options... we will have to assume that It will take time/it will not be easy for Nifty to Break any of these Levels ..

So What should person holding a long position Do to hedge ?

Well i say SELL a CALL...

Cause say Nifty goes uptill 3250 ! BUT there is should stop pull back a bit andthen maybe resume upward journey.. And By this time The Month Usually gets Over !! And similar is the case for Nifty to Break 2800 ...

Thus After Calculating according to examples above ... It is clear that Selling the Call would have been a Much better Option than Buying a Put ..


**Well .. Srry if a made a mistake anywhere here... Never wrote such a Big Post !! hehe
Will be most happy to Listen to other boarders comments/advice and Any add on's to this...

Thank you arnav for such a detailed explanation. Though I do not trade in options still the post was very informative. I was not knowing even abcd of futures but now I am trading successfully simply going through 60 minute flow, mini flow and this thread though still I have to learn a lot. This forum is full of gems and you can become a successfull trader just by reading and learning from seniors. Really I am proud of being in the company of so many intellegent and helping members.

 

[Sunil]

Just for analysis:

6th Jan 2009 EOD:

Fut long from 3085 to 3133 = +48
1. Sold, Call 3100 from 115 to 97 = +18
2. Bought, Put 3100 from 127 to 132 = +5

Buddy, I think, by mistake, you have reversed the prices between call & Put

correct LTPs:

Long Fut from 3085 to 3133 = +48
hedged with

Short Call 3100 from 115 to 132 = -17
or
Long Put 3100 from 127 to 97 = -30
(15 days to expiry)

Even I was wondering, how hedge taken & main position, both be in profit

 

[TrendPlayer]

Buddy, I think, by mistake, you have reversed the prices between call & Put

correct LTPs:

Long Fut from 3085 to 3133 = +48
hedged with

Short Call 3100 from 115 to 132 = -17
or
Long Put 3100 from 127 to 97 = -30
(15 days to expiry)

Even I was wondering, how hedge taken & main position, both be in profit

Sunil: Thanks for correction ...yup copy paste mein locha kar diya