NIFTY Options trade : Why and what-if...

[timepass]

either we break 5170 now or we retrace back above 5300+ for a tgt of 5480...!

You mean close below 5170 or just break ??

 

[linkon7]

You mean close below 5170 or just break ??

close below or just break doesnt matter...! what is important is the reaction to that level...! spring gets coiled to the maximum at that point and i expect a fast 200 point move in either direction.

So far, my bias remains bullish...!

but south move will give profit as well...!

 

[Bigbear]

now i have 3 legs...!

5200 put long + 5100 put short : treat this leg as a spread...!

5400 call long : will treat this as a standalone trade...! will act as a hedge for the 5200-5100 put spread...!

either we break 5170 now or we retrace back above 5300+ for a tgt of 5480...!

You will make limited profit if it breaks 5140 downside.
But you will make unlimited profit if it goes above 5450..

Am i right linkon sir?
I feel downside target is achievable , but upside target is still in question..
Is there anything you do once it reaches 5300 levels like.. Exit 5200 put?

Regards

 

[linkon7]

You will make limited profit if it breaks 5140 downside.
But you will make unlimited profit if it goes above 5450..

Am i right linkon sir?
I feel downside target is achievable , but upside target is still in question..
Is there anything you do once it reaches 5300 levels like.. Exit 5200 put?

Regards

i keep changing the equation everyday...! totally depends on how we open and how we react to the open price.

Towards the end of the day.... I do another adjustment.

Options offers endless combinations and just a few tweaks here and there helps meditate risk...!

 

[adityasaraf007]

Hi Linkon Sir..... I have got a few questions with regard to Options which might creep in the minds of anyone new to Options..... It's not the basics, but about the deeper understanding of this Instrument...... I would like to put these questions up here progressively.....

My first question is:

As you trade both Futures and Options at the same time.... How do you decide whether to take the position in Futures or in Options?

No hurry..... Take your own time....

 

[linkon7]

Hi Linkon Sir..... I have got a few questions with regard to Options which might creep in the minds of anyone new to Options..... It's not the basics, but about the deeper understanding of this Instrument...... I would like to put these questions up here progressively.....

My first question is:

As you trade both Futures and Options at the same time.... How do you decide whether to take the position in Futures or in Options?

No hurry..... Take your own time....

Futures and options are not separate entity for me. But most of my positions are in options as they provide me opportunity to control my risk per trade.

Like for friday session, my expectation was 5170-5150 will hold as a support zone. I was carrying 5200-5100 put spread and 5400 call long from day before.

Market opened lower and decided to test that zone. first 5 min had a range of 5201-5180. We broke the 5 min OBR high but failed to cross the 5321 (the LOD of 3rd). This was first sign that bulls were interested on lower prices. 10.00 bar broke the 5196 minor support and that was my first signal to go short...! system says to place stoploss at 5208.5. trading range was 5216-5180.

I exited the 5400 call at 21.50, placed trigger buy at 26.50.

image upload

Held on to the 5200-5100 put spread as we are now heading into known support zone. Waited patiently for buy signal...

signal came at 11.05
there was a failed break down at 5168.
Buy came at 5173, TSL at 5147..
I manged to get buy at 5171... placed sl at 5147 as per system...

jpeg image hosting

Also got the same signal on 5200 put...
exited the 5200 put long at 108...

image hosting png


5400 call was at 18 at that time... so removed the buy trigger. Not interested in buying that strike price any more.

held on to the 5100 put short which was trading at 65-68 zone...
placed SL for 5100 put short at 74.10 as per system...

image host


Up thrust should take us above short term pivot at 5200 or else we will see more down side...!

Now intention is to lock some profit on the NF long (by shorting 5200 call by making it a covered call ) the moment i get a sell signal and also to get rid of the 5100 put short....! Lvl to watch is 5200...!

Sadly, at 11.30 bar, my system gave a sell at 5188 after making a high of 5197 the bar before...!

image hosting jpg

5100 put short i exited at 59.50...

adult image hosting

I had 2 decision to make at that time... To enter short on 5200 call which was trading at 85-87 or just exit the NF long...! I decided to short 5100 call instead... as that will offer me wider stop loss. Trend was definitely down and i needed the room as supply was coming above 5200 lvl itself...

image upload

SO ended the day with NF long at 5173 and 5100 call short at 144...!
I managed to exit my bullish positions with minor profit...!

Nifty closed at 5199 while 5100 call ended at 146...!

I am still long... with sl at 5147 and lvl to watch is day's LOD @ 5161...!

 

[adityasaraf007]

You are an absolute pro at it..... To manage 5 different Contracts in Real Time...... I don't have words for it...... I guess I have to find someone of my level for this question..... To take a position in Future/Option comes naturally to you......

 

[adityasaraf007]

But now I do understand why do you say Options provide you with opportunity to control your risk.....

Great post..... Thank you

 

[linkon7]

You are an absolute pro at it..... To manage 5 different Contracts in Real Time...... I don't have words for it...... I guess I have to find someone of my level for this question..... To take a position in Future/Option comes naturally to you......

Nothing to do with being a pro...! i have to plan out my action before the day starts. And during the day, its a matter of execution.

Like NF long and 5100 call short.. the line of action is simple...!

If on monday, we respect the 5162 mark and trade above 5216.. then will short 5200 put... ride NF long and 5100 call short...

If 5162 is not respected... then exit NF long... and hold 5100 call short till i achieve BE...

Monday, my game plan is relatively simple...! wait for signal and place sl as per system and then wait....!

 

[adityasaraf007]

Do you mind if I post some of the Option Trades in RealTime and then give my reasons for it either then or at the end of the day..... I have never traded in Options earlier and all the trades I put up would be Paper Trades unless specifically mentioned to be Real......

The objective is to get the basics right and not to do something silly......

And thanks for the effort you made for that post..... Must have took you about an hour or so.....

Regards