Nifty Futures Trading

[terminator_123]

put rates are not comming down ?
Why ????????????

Volatility... more perceived downward risk...

 

[rajneesh_mailbox]

Strategy which I am trying to put together i.e. to make a profit without doing anything in between from start to end of expiry.

Sell
3500CE May is 160, 3500PE is 176 – so total premium recd is 336/-
(So we are covered till 3836 on the higher side and 3164 on the lower side. if naked shorts of the above)

Supposing mkt moves above or below these levels then just by this trade we are in deep trouble as losses will be huge above 3800 and below 3200 – therefore to protect ourselves from this,

Buy – 3400 PE @ 133 and 3600 CE @ 114 thereby decreasing our income by 247/-.

Ultimately our premium credit now arrives to 336 – 247 = 53+36 = 89 pts.

Now -
A. Say mkt expires at 3500 then
Total profit remains @ 89 credit premium.

B. Expires at 3600 then
89-100=11 pts loss

C. at 3700 then
3500CE = -200, 3600CE=+100, Premium credit = +89; Total = 11pts loss.

D. at 3800 then
3500CE = -300, 3600CE=+200, Premium credit = +89; Total = 11pts loss.

E. at 3900 then
3500CE = -400, 3600CE=+300, Premium credit = +89; Total = 11pts loss.

So wherever the mkts close at or above 3600, we are at loss of 11pts.

For the downside :
A. Say mkt expires at 3500 then
Total profit remains @ 89 credit premium.

B. Expires at 3400 then
89-100=11 pts loss

C. at 3300 then
3500PE = -200, 3400PE=+100, Premium credit = +89; Total = 11pts loss.

So wherever the mkts close at or below 3400, we are at loss of 11pts.


Conclusion :
If mkts close nearabout 3500 (which by itseff is wishful thinking), we are profiting 89pts on an investment of 1sold call and 1 sold put i.e. 2 lots Nifty which would come to approx Rs. 30000 and need some more for M2M, say 15000/-. The buy call and buy put would be paid from the premium recd.

i.e. 4500 on 50000 inv, comes to 9% ROI.

If mkts move otherwise then max loss is 11 pts or 550 Rs.


Now dear members,
1. Is this ROI good? Considering that we will NOT BE DOING ANYTHING AT ALL INBETWEEN.
2. Any flaws in the logical end result of the profit/loss generated, something which I may have missed and IS a silly mistake
3. A possibility of loss making means failure and does not give the end result I am looking at therefore would suggest members to give a suggestion to improve end result.

Wishful thinking
Another possibility is that say after 7-10 days, the premiums would have reduced and ending the trade there would result in a better profit and/or ROI, depends on the market at that point of time and the sentiments which make the premiums a bit wayward..

Dear friend, the only problem with this strategy is in execution & brokerage. it is very hard to execute these 4 trades with 89 point gain. if u have tried this then ,plz, share ur experience. for me even roll over of position is draining.
another problem u'll face in mark to mark margin money required to be deposit. since u do'nt get credit for bought option. so ur one option will always be in the money & require additional margin-rajneesh

 

[MurAtt]

Dear friend, the only problem with this strategy is in execution & brokerage. it is very hard to execute these 4 trades with 89 point gain. if u have tried this then ,plz, share ur experience. for me even roll over of position is draining. rajneesh

Nope not actually traded this - we have done a paper trade and will review at the end of the month i.e. on expiry.

Of course the end result is basically known to all as per the calculations but then too lets see where we end up ...

Am trying to addsomething to this or maybe something new where the reward is a lil more.

Insha-allah will post when ready ...

 

[rajneesh_mailbox]

Dear friend, there is a lot of difference between paper & real trade. espescially this one. real issues in trading option comes only in reality. like the huge margin required for mark to mark in india. unlike west ,there is no benifit in hedge strategy . broker will treat every position as independent position. while execucution u'll notice the difference between bid and ask price. even if it is slightly off the strike price. comaparatively illiquid option.
in no way ,take this a demoralizing reply, i am telling my expereince( i trade sometime & a big fan of option)
plz share ur experience.
rajneesh

 

[pratik_ghosh]

which is the best way to trade the present market..anyone in this thread is using saint sir's pivot method to trade the hourly nifty chart....
i left trading before some days and i want to make a fresh start...a simple start with nifty future with saint sir's method....if anyone can help me, i ll really appreciate it

 

[darshanshukla]

Dear friends,
Reading your threads since long,
what is your openion regarding attached chart of Nifty Cash, of yesterday(EOD) which shows Negative Divergence in all indicataors like
RSI, MACD, Momentum and Moneyflow Index (MFI) and many more.
Please give your openion

Dr. Darshan Shukla

 

[pra]

Dear friends,
Reading your threads since long,
what is your openion regarding attached chart of Nifty Cash, of yesterday(EOD) which shows Negative Divergence in all indicataors like
RSI, MACD, Momentum and Moneyflow Index (MFI) and many more.
Please give your openion

Dr. Darshan Shukla

whenever strong breakout happened opposite dibvergence will be neglected at least near term . It is a one of the main rule of TA.

 

[MurAtt]

http://3.bp.blogspot.com/_OzqzswgRyzE/Sf8xta0cr5I/AAAAAAAAB6o/cZnMblW1Bc0/s1600-h/Sensexfibo.png

 

[Sunil]

http://3.bp.blogspot.com/_OzqzswgRyzE/Sf8xta0cr5I/AAAAAAAAB6o/cZnMblW1Bc0/s1600-h/Sensexfibo.png

interesting study, murtuza....
i've not checked with nifty, but applying same calculation for nifty from 4650 to 2250, 61.8% comes to around 3735, which also is the immediate day high after 3800 broke down.
the rectangle of 3300-3500 also has the target at 3500+200 = 3700

Spot's high as of now 3680. the end of the rally is near. Logically, 3800 is the MAX it should go upto - a goodbye kiss to the earlier multi-month support (RSR) of 3800.

If one considers the bigger rectangle of 2500-3150, then here too target comes at 3800.

 

[MurAtt]

interesting study, murtuza....
i've not checked with nifty, but applying same calculation for nifty from 4650 to 2250, 61.8% comes to around 3735, which also is the immediate day high after 3800 broke down.
the rectangle of 3300-3500 also has the target at 3500+200 = 3700

Spot's high as of now 3680. the end of the rally is near. Logically, 3800 is the MAX it should go upto - a goodbye kiss to the earlier multi-month support (RSR) of 3800.

If one considers the bigger rectangle of 2500-3150, then here too target comes at 3800.

Sunil Sir is back ...

Boyz ....

We are all back in business ...

And forgot to mention in the earlier post but after Sunil sir commenting on that would like to write that the study was not mine but was at a blog which I do folow from time to time. Nooresh bhai's Blog.