NIFTY Options Trading by RAJ

[shiv2012]

Hi Raj,

I just observed a lot of disparity between the IVs of Puts( around 30) & Calls( around 20). Does that mean that the big guys are still bearish and demand higher volatility premium for selling puts?

 

[Option.Trader]

Looks like a breakout on the upside on day charts, going long in futures @5530 with stop loss @5518, also accumulating puts at imp resistances

Those in position can target 5575 as per Raj post. Move the stop loss towards your buy price. Cool 30 points as of now

 

[whisky]

As per the OAT tool, the Top is 5596 and the Pivot is at 5525. Since 5525 is broken, the Top would be at least 50 points from 5525 which is 5575. So Go Short if you get it around 5575 with stoploss as 5596.

Excellent Catch:thumb:

 

[healthraj]

Hi Raj,

I just observed a lot of disparity between the IVs of Puts( around 30) & Calls( around 20). Does that mean that the big guys are still bearish and demand higher volatility premium for selling puts?

Yes it might be. One more indicator to suggest that the market is on downside is the INDIAVIX. Normally when the market goes UP, the VIX goes down. But today if you noticed, even when the market is 100+ points UP, the VIX is going UP. Also as you suggested the Options price.

When the market was around 5500, the 6000 (500 points from 5500) CE was at 5 but 5000 PE was around 35. So there is no comparison. The BEARS are ready to Pay 7 times the Premium for the PE, which is a STRONG BEAR.

 

[healthraj]

Options Data for SEP-13.

One thing which is unusual in this Series is that there are not enough positions created in CE. Even though now the MAX OI is at 5500. The Difference between 5500, 5600 and 5700 is only in Few lakhs. So this indicates that the TOP is still not decided. It could be 5700 as well.

We are already near 5600.

The bottom is more or less decided as 5300. So those who are playing for 250 points from here (5550) play with bottom as 5300 and not 5100/4900 etc..

The MAX Pain is still at 5500. It is at 5500 for the past two weeks. I have been observing the SEP-13 from Mid August

 

[healthraj]

Normally the market makes Full 110-120 points. So as per that rule, if the Bottom is 5458 then 110 points from that is 5568, which is the previous high. 120 points from 5458 would be 5578, which is what the level I gave you to Short but market went down from 5568 itself.

If the markets do not correct today (Go below 5525) then we can expect the market to touch 5596 tomorrow. So trade accordingly.

 

[Option.Trader]

Yes it might
When the market was around 5500, the 6000 (500 points from 5500) CE was at 5 but 5000 PE was around 35. So there is no comparison. The BEARS are ready to Pay 7 times the Premium for the PE, which is a STRONG BEAR.

I think this phenomenon is more due to the big drop in last series and people expecting a similar drop in this series. Once Nifty moves above 5600, all these short positions will start coming off. Already 500 points up from lows of Aug 28th

 

[healthraj]

If the Market goes below 5538 SPOT, you can confidently go short for at least 50 points. hope a double top is made at 5564 and 5562 in the hourly charts. So the SHORT is confirmed I think

 

[healthraj]

Today I remembered the famous idiom... When the (BIG) Cat is away (US market on holiday) all the little mice (Non US Markets) will play. Tomorrow the Cat will be back

 

[healthraj]

The 4700PE-5600CE bought at 83 (when NIFTY was around 5280) is now trading at 110 with 27 points profit. Asked to close 50% at 5480. Book 100% at 5225-5250. And Again trade for Shorts for 250 points on the downside.

This time we will Trade a Bear Strategy of

Buying 5300 PE @ 82 and Selling 5200 PE @ 62.

It is a Limited Risk and Limited Profit Strategy.

Per lot the Loss will be limited to around 750 even if the market reaches 6000.
The Profit at 5250 would be 1500. At 5000 the profit would be 2500
It is more or less a VOLATILE Neutral strategy.

If there is a clear Trend on the downside, then You can buy more 5300 PUT

Those who played the Strategy, today the market closed with 2 points loss.