Nifty Open Interest Analysis

[Option.Trader]

Date : 20.3.2013


Lets see if this particular strangle works ..
sell 5800 CE @26.20, Sell 5700 PE @46.05 Total inflow 72

Expectations : Range bound between 5700-5800

How did we do?
In post no 246, on 20th march, quoted above we had suggested the strangle of sell 5800CE @26.20 and 5700PE @ 46... total inflow - 72
How did we do today?
5800CE - 0 , 5700PE - 16.25 ..

Total profit - 72 - 16.25 : ~ 56 points for a weeks play..

We had also suggested yesterday of Nifty holding 5600 from options data and boy did it hold...

Hope you'll could co-relate the same and all the best for your future trades...

we'll only discuss on Option calls going forward with reasoning and see how we perform...

 

[R M]

How did we do?
In post no 246, on 20th march, quoted above we had suggested the strangle of sell 5800CE @26.20 and 5700PE @ 46... total inflow - 72
How did we do today?
5800CE - 0 , 5700PE - 16.25 ..
Total profit - 72 - 16.25 : ~ 56 points for a weeks play..
We had also suggested yesterday of Nifty holding 5600 from options data and boy did it hold...
Hope you'll could co-relate the same and all the best for your future trades...
we'll only discuss on Option calls going forward with reasoning and see how we perform...

Great analysis! Not only 5600 stood rock solid but 5700PE writers ensured almost zero pay outs.
Congrats!

regards.
rm

 

[aditya14]

How did we do?
In post no 246, on 20th march, quoted above we had suggested the strangle of sell 5800CE @26.20 and 5700PE @ 46... total inflow - 72
How did we do today?
5800CE - 0 , 5700PE - 16.25 ..

Total profit - 72 - 16.25 : ~ 56 points for a weeks play..

We had also suggested yesterday of Nifty holding 5600 from options data and boy did it hold...

Hope you'll could co-relate the same and all the best for your future trades...

we'll only discuss on Option calls going forward with reasoning and see how we perform...

Here is how your "Call" performed:

All 4 days it touched intraday highs way above 72(no SL?) and today itself it made the highest high of 97..... This is exactly how people go bankrupt....Imagine if 5600 had broken and this pair(ha what pair)

Oh by the way if you were really trading this pair you would have known that the close was at 17.45(real close) and 23.15 at last rate.This is paper trading at its worst...

Date Open High Low Close Settle Price
28-Mar-2013 67.15 97.00 13.15 23.15 0.00
26-Mar-2013 86.00 87.60 54.00 65.85 65.85
25-Mar-2013 35.00 80.00 26.45 70.95 70.95
22-Mar-2013 74.00 80.00 39.85 59.20 59.20
21-Mar-2013 23.30 76.85 23.30 70.40 70.40

 

[aditya14]

Meanwhile in the real world I made a cool profit as i always do on expiry day:

Service Tax 456.82
Securities Trans. Tax 4.00
Stamp Duty 0.64
Turn Over Tax 15.96
Sebi Tax 0.03
Total amount due to You Rs. 8,025.05

Now please show me your 56 point profit i dare ya

 

[Alfred595]

Good Analysis. Please continue on a daily basis.

 

[Option.Trader]

Here is how your "Call" performed:

All 4 days it touched intraday highs way above 72(no SL?) and today itself it made the highest high of 97..... This is exactly how people go bankrupt....Imagine if 5600 had broken and this pair(ha what pair)

Oh by the way if you were really trading this pair you would have known that the close was at 17.45(real close) and 23.15 at last rate.This is paper trading at its worst...

Date Open High Low Close Settle Price
28-Mar-2013 67.15 97.00 13.15 23.15 0.00
26-Mar-2013 86.00 87.60 54.00 65.85 65.85
25-Mar-2013 35.00 80.00 26.45 70.95 70.95
22-Mar-2013 74.00 80.00 39.85 59.20 59.2
21-Mar-2013 23.30 76.85 23.30 70.40 70.40

Looks like some body got out of the wrong side of bed . On the stop loss side what you failed to notice is that there was an inherent protection of 26points from 5800 CE writing.
Anyway we always have room for improvements.

 

[sridhar]

April options data at the end of Expiry (28th. March) seems to suggest that 5600 is the bottom level & that 5700 is one resistance & next level is 5900.
Is this interpretation correct or should we wait for data to build up on Monday?

 

[prabhsingh]

How did we do?
In post no 246, on 20th march, quoted above we had suggested the strangle of sell 5800CE @26.20 and 5700PE @ 46... total inflow - 72
How did we do today?
5800CE - 0 , 5700PE - 16.25 ..

Total profit - 72 - 16.25 : ~ 56 points for a weeks play..

We had also suggested yesterday of Nifty holding 5600 from options data and boy did it hold...

Hope you'll could co-relate the same and all the best for your future trades...

we'll only discuss on Option calls going forward with reasoning and see how we perform...

What about Margin calls that would be generated on daily basis as you are selling Call/Put.If we take that into consideration does profit still comes out to be 56?

 

[Option.Trader]

What about Margin calls that would be generated on daily basis as you are selling Call/Put.If we take that into consideration does profit still comes out to be 56?

As far as i remember margin for 5700PE was to be triggered at 5575 & 5800CE at 5924.. it does take a lot of patience to sit in .. but relatively safe if we play with the trend...

There is merit in what the previous boarder commented. You could actually come out of 5700 PE based on Tuesday's unwinding taking the OI below 70L and shifted to 5600PE for better returns... but like i said this is the first step... it does to some degree hold true about OI>70L acting as support for that level

 

[aditya14]

Looks like some body got out of the wrong side of bed . On the stop loss side what you failed to notice is that there was an inherent protection of 26points from 5800 CE writing.
Anyway we always have room for improvements.

oye Inherent paji your total inflow was 72 including 26 from Call writing....

Now all the days post start this pair(a pair is usually constructed looking at delta neutrality but since you`re doing OI tukka analysis i will let you pass and your creation of this pair)

This pair went delta heavy in wrong direction very quickly as soon as 5700 level was broken(I know because I have been doing delta neutral trading at 5700 5800 and 5600 levels)

What you essentially did was you had a trade that was more of a neutral trade(5700-5800 range) and it went below 5700 and you are now holding a naked short put.When you read some books these are the kind of trades which made double sure some banks went bankrupt.

You did no analysis and just got lucky that the CAD numbers did not get released during market hours.Essentially when that put went to 97 you were just praying to God that please market come back in our direction.