NIFTY Options Trading by RAJ

[Option.Trader]

Two positives from the RBI meet, it caught almost all by surprise as seen from the instant fall, usually there's a spike before the announcement or previous day indicating information being known to some, looks like the new guv managed a tight ship and caught everyone by surprise. Two cheers for integrity, there were doubts on the other one with Gold spiking up before announcement
The second positive is something thats been noticed in the last 2 years, a rate increase has been a case of buy on dips and rate decrease has led to sell on rally kinda situation. Nifty holding up 5930 looks promising, but really precarious. Not sure if the Max pain has been taken out via the 2 dips that we saw today

But FII's sure look a cheerful lot and increased their long only campaign in Nifty future. They are now almost 250K contracts long on nifty future.. we saw what happened when they unwound all their shorts in last series.. will a similar reverse situation happen when they unwind all their longs? Expiry looks interesting for another debit spread play with puts.. my choice of WMD's - buy 1 lot 5900 PE and sell 2 lots 5700PE

 

[healthraj]

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When I had asked this question in my post , I did not get proper response except Healthraj(and one more person I dont remember his name but he pointed out my mistakes which was the purpose of mine to post and not arguing with anybody) off course he has given his reasons which was fair enough.
I was just saying that it looks like a trading range on weekly chart and it should reverse.
It did reverse and touched the upper side also rather faster than my expectations and with that view only I had paper traded and trades were posted in Stocktrendy's thread.

Thanks

Manoj,

This type of opportunity we get once in 5 years. So if you have traded made 1000 points, that is good for you.

Just one thing. Never try to prove that you are right because it is not going to help you in the trading. Rather if you are prove you are wrong you can learn from it. Trading is about continuous learning and improving.

Keep up your good analysis so that you get more confidence.

 

[toocool]

Two positives from the RBI meet, it caught almost all by surprise as seen from the instant fall, usually there's a spike before the announcement or previous day indicating information being known to some, looks like the new guv managed a tight ship and caught everyone by surprise. Two cheers for integrity, there were doubts on the other one with Gold spiking up before announcement
The second positive is something thats been noticed in the last 2 years, a rate increase has been a case of buy on dips and rate decrease has led to sell on rally kinda situation. Nifty holding up 5930 looks promising, but really precarious. Not sure if the Max pain has been taken out via the 2 dips that we saw today

But FII's sure look a cheerful lot and increased their long only campaign in Nifty future. They are now almost 250K contracts long on nifty future.. we saw what happened when they unwound all their shorts in last series.. will a similar reverse situation happen when they unwind all their longs? Expiry looks interesting for another debit spread play with puts.. my choice of WMD's - buy 1 lot 5900 PE and sell 2 lots 5700PE

can you post the meaning of this image because , newer people like me (to option analysis like this) did not understand what big red bars mean

 

[Option.Trader]

can you post the meaning of this image because , newer people like me (to option analysis like this) did not understand what big red bars mean

The change in OI depicted by the bars indicate option activity w.r.t previous trading day. Usually we are concerned with market makers i.e option writers, bulls are generally pe writers and bears vice versa. Usually after a huge fall, bulls are shaken out of their wits and rush to cover their puts written leading to an unwinding shown by the red bars. Bears meanwhile get a bit bold and add to calls leading to an addition in OI as seen by green bars

 

[Option.Trader]

Any one have mechanism to calculate rollovers during expiry?

For instance, Nifty September futures unwound 12L contracts and Nifty October Futures added 5L contracts. So can we say that 5L contracts from September got rolled over to October?If so, then it would be interesting to know if set ups are being done to close September on a high and take the mickey out in october?

 

[vishal7176]

to all

is this thread is dedicated to only OPTION .

thank you so much for your effort.

is anyone have PDF format of this thread ( OR summarisation of IMP posts) , if any one have then please post here link .

thank you

 

[healthraj]

Please share Simple Strategies

Good morning. A lot of folks are sending me personal messages and mails asking me how to Trade options. I think my initial rules clearly explain how to trade in a normal (Less Volatile) market using Credit spreads, which worked in the month of Jul-13. In the month of Aug-13 and first half of SEP-13, since the Volatility was high the Debit spreads seems to have given more profit.

So for those of you are using OAT, and want a detailed document on how to Trade Options, I will surely document and let you know the strategies which will work. But on a broad level basically there are only the following strategies
- Credit spreads (Selling options)
- Debit Spreads (Buying Options)

The main parameter to consider whether to go for Credit / Debit is VOLT

- VOLT increasing or in Trending market - Debit spreads
- VOLT decreasing or Sideways market - Credit spreads

As I am also not an expert and still trying to figure out or Learning, it would help if people can contribute to put down a simple document to Trade options. So those who have been using OAT and if you have used some simple strategies which has worked, Please share it with me or in this forum so that I can consolidate and share it with others

 

[healthraj]

Trading Today for the RBI Policy Event.

Normally in such days, it is better to Wait till 11 AM and take the positions because till 11 AM it would be very volatile.

Keep an eye on VIX. VIX has hit the lower part of the channel and going UP, indicating a SELL.

As per the MAX OI, the market could test 6200. I am not sure whether it will test today because yesterday it made a high of around 6170.

As per the MAX Pain theory and the positional call of 240 points, there was an opportunity Yesterday to Sell between 6150 and 6200. Try and sell around the same level. It is better to take your positions around 10:45:10:55.

For those who want to Trade Debit spreads, can buy 6300CE and 5900PE for a combined premium of 35.

On Friday, When the market was at 6150 and the max pain at 5900, we took a Positional Call from 6150 for 240 points to 5900. For trading with Options we booked 50% on Friday itself at around 5925. After that MAX Pain changed to 5800? So as per the MAX Pain theory how many of you are still holding the Shorts for Targets of 5800?

The 5900-6300 Pair taken at 35 is still Trading with Profit of 20 points. So those who want to hold till 5800 can hold. Otherwise you can close now and Take a new pair in OCT-13, because market has made more or less 240 points from the NF High of 6175.

The OAT Tool says that today's intraday high would be 6014 and Low would be 5697. Today the HIGH 6011 already made in NF. So 5697 should be very much possible if the Intraday pivot of 5855 is broken. So at least 5855 should be tested as per the OAT tool.

 

[anup]

On Friday, When the market was at 6150 and the max pain at 5900, we took a Positional Call from 6150 for 240 points to 5900. For trading with Options we booked 50% on Friday itself at around 5925. After that MAX Pain changed to 5800? So as per the MAX Pain theory how many of you are still holding the Shorts for Targets of 5800?

The 5900-6300 Pair taken at 35 is still Trading with Profit of 20 points. So those who want to hold till 5800 can hold. Otherwise you can close now and Take a new pair in OCT-13, because market has made more or less 240 points from the NF High of 6175.

Max pain theory working well once again.. :clap::clap:

 

[healthraj]

Max pain theory working well once again.. :clap::clap:

Yes We have been Tracking this MAX Pain theory for the past 4 months. Yes it has worked once again. When the market was at around 6175 NF, the MAX Pain was at 5900. So whoever believed the theory and shorted from those levels would have got 240 points. Whether the Credit Spread or Debit spread works the MAX Pain theory seems to be working. And every time it has given at least 200 points :thumb::clap: