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

[columbus]

The effective zone continues to be 4600~4900 .The options pertaining
to CALL and PUT side are 15M and 14M in the EFFECTIVE ZONE.The
markets are highly undecided in which direction they want to go.With
TWO strikes on PUT side and ONE strike OPEN ,the bias is little NEGATIVE

 

[columbus]

With 100+ points movement on NIFTY,the effective zone moved to 4600~
5000.Suddenly premiums on PUT side has fallen drastically and on the other
hand on CALL side they have added value.(Which was highly unexpected).

 

[columbus]

The UP movement in Nifty by over 100 points has changed the premiums
drastically.On PUT side premiums has weakened by around 60% whereas on
CALL side they are strengthened by 70~100%.It looks as if market likely to
move in CALL direction.Any FALL in index may be used to liquidate PUT
positions in small trenches.

 

[columbus]

Today NIFTY is highly range bound and highly volatile with EFFECTIVE
ZONE ,4600~5000.Most of the PUT premiums turned WEAK as PUT window
is closed upto effective zone.

 

[columbus]

NIFTY (low) of 4805 was a freak trade.It was not recorded by charts.Nifty
was range-bound in 40 points only.(4890~4950)

 

[LivetoTrade]

Seems like both PEs and CEs had been shorted, thanks to indecision, and shorts in CEs got covered which helped in the upmove.

The PCR of Jan 7th and 9th have been mis-leading, or maybe there is some better way to interpret it which I do not understand yet.

 

[columbus]

Today EFFECTIVE ZONE ,4600~5000.Most of the PUT premiums turned WEAK
as PUT window is closed up to effective zone.(up to 4600).HUGE position built-up
in PUT side is a clear indication that index may move in CALL side.(PUT premium
low means high accumulation). Another observation ,in effective zone, call side
3 strikes added position whereas 2 strikes shed position.In put side 4 strikes
shed positions whereas 1 added position.

 

[columbus]

3 strikes below NIFTY and 3 strikes above it, are analyzed.Generally premiums
of PE are opposite to CE.But today both have same sign.Today the market was
quite UNDECIDED where to go.

 

[columbus]

The EFFECTIVE ZONE continues to be 4600~5000.As we approach EXPIRY
some of the strikes in effective zone will be closed.In fact today 4600PE is
about be closed and missed by whisker as LTP=10.80. The OI addition is
rather mixed ,with a big addition of 1.3million in 4800PE.

 

[chintan786]

Hi Columbus and LinKon..

Can u recommend some book(s) regarding trading options, selling options etc.

Thanks & Regards,

Chintan