NIFTY Options Trading by RAJ

[DanPickUp]

@Dan, Yes it is may be 90% true for Expiry Range. This 90% is based on my last three months observation. So even as per the Statistical theory we need minimum 7 points for the law of averages to work. So my 90% is debatable. May be I will be able to tell you with enough conviction when I have the data for 4 more months

It also acts as the Centre of gravity. That way if nobody knows where the market will go they can ask Mr. MAX Pain for some direction. For example in Aug-13 Series, if you notice the NIFTY movement, you will see how many times it went near 5500 (MAX Pain in Aug-13 was at 5500 for 80% of the days)

6000 - 5508 (08 Aug) - Down 500 points MAX Pain at 5500
5508-5754 (14-Aug) - UP 250 points MAX Pain at 5500
5754 - 5500 - 5308 (20-Aug) 450 points MAX Pain at 5500
5308 - 5504 (21-Aug) - 250 points MAX Pain at 5500
5504 - 5254 (22-Aug) - 250 points MAX Pain at 5500
5254 - 5528 (26-Aug) - 250 points MAX Pain at 5500
5528 - 5119 - (28-Aug) - 400 points MAX Pain changed from 5500 to 5400 to 5300
5119 - 5400 - 5500 - 5579 (03-Sep) - 450 points. MAX Pain changed from 5300 to 5400 and MArket expired on 29-Aug at 5409.

SEP-13 Series MAX Pain was at 5500 and 5600 was also peeking sometimes and so MAX was between 5500 and 5600 to 5579.

So you can see that 5500 was crossed 5 times starting from 01-Aug-13. If somebody was blindly taking a 250 position away from 5500, then he should have theoretically made 1250 points in NIFTY. Market in Aug-13 made around 1900 points and 1250 points out of 1900 is 66%.

So there is something in this MAX Pain.

Hi and thanks to take your time to post the above numbers and comments. :thumb:

If you have this data and want to show them, I mean that is fine. I did compare your OI you posted about Nifty with a program I use on probability math and where you had your max pain, I had with other numbers the same range or level/targets. I do not know how the software is build up, but one of the most important data to put in is Vola and time. An other program I use is the Mc Millen calculator. Also not a bad tool to use in combination with OI from options.

As far as my experience goes, for every thing in trading there exist different methods with similar results. If we can combine such tools, we have some times some % more of odds in our favor to look at the market.

Thanks for the chat and have a nice evening

DanPickUp

Edit: As I not trade your market live, I only compare tools which I use in my market (CME). So some times it is really interesting to do so and opens a traders mind to other stuff or even seconds the use of some stuff we do use in our trading.

 

[healthraj]

Market regulator Sebi today asked stock exchanges to calculate circuit limits -- the maximum permissible movement allowed to Sensex or Nifty in a trading session -- on a daily basis as against the current practice of doing the same on a quarterly basis.

http://economictimes.indiatimes.com...tem-for-sensex-nifty/articleshow/22259676.cms

So you can expect some Volatile days in OCT-13 also. Good for Options Trading.

 

[Option.Trader]

Agree with Dan. I have taken the pain to develop a tool which is available freely to you with all the source code. So try to make best use of the tool and you can make informed decisions. I myself is making all the decisions based on my OAT tool only.

@gujrant It's a different feeling when what you have uncovered plays out, playing with others call is always fraught with danger, what happens if Raj decides he has made enough and now wants to retire, you get the idea right. It's difficult and believe me I have spent almost a year looking at just ways to successfully write options, but it's rewarding and gives a sense of satisfaction

 

[VJAY]

It is a hidden sheet called "SOData" and not "SO".

Dear raj,
in BA column showing only some scrips names including NIFTY !

 

[healthraj]

Dear raj,
in BA column showing only some scrips names including NIFTY !

Remove NIFTY from the list to have the XX00 strikes (or to ignore the XX50 strikes)

 

[sabhlok_r]

today's OTP pick....bnf long @ 8750 and dlf short @ 124...all levels in fut

 

[pictforu]

Is there any problem with Google today? It is not opening at my end.

 

[prabhsingh]

Short around SPOT Nifty 5421 levels.

 

[sabhlok_r]

today's OTP pick....bnf long @ 8750 and dlf short @ 124...all levels in fut

update -
dlf cmp 123...made a low of 122.65
bnf cmp 8785...made a high of 8848.75

 

[healthraj]

The NIFTY Futures Pivot is at 5446. So those who are long hold your Longs. Those who want to Go short Go Short around 5425-5445 with corresponding stoploss