NIFTY Options Trading by RAJ

[healthraj]

NIFTY Futures Premium for OCT-13 and NOV-13 - VERY HIGH.

When the market was at 5830, I was looking at the SGX NIFTY Futures Price to get some direction and could see a difference of some 60 points between the NSE NF and SGX NF. I think what they displayed in SGX was OCT-13 Futures.

Anyway my point is the OCT-13 Futures Trading at a premium of 66 and NOV-13 Futures Trading at a Premium of 100. I have seen this kind of Huge Premium some years back when the FIIs brought the market up from 4600 to 5600 and there was some VERY HIGH Volatility. And at 5600 the Premiums were very high in the range of 60+ and the Profit booking started...

My personal opinion is that tomorrow if the Premium stays at 66 or 100, it could be a very good opportunity to SHORT. So have an eye on OCT-13 and NOV-13 Futures. It would also be a very good opportunity for Debit Spreads because the VOLT would increase. So in the beginning of OCT-13 Series, you can see some HIGH VOLT trades if the Premium continues to be HIGH at 66 or 100 levels. So tomorrow EOD, you can also Buy a Debit Spread.

Same is the case in BNF also. The OCT-13 Premium is 108 and NOV-13 Premium is 178.

 

[appajib]

Raj bhai

I am new to the options..but I continuously follow ur thread..
You said about debit spreads and credit spreads..
Pls elaborate them...
thx & regards

 

[healthraj]

Raj bhai

I am new to the options..but I continuously follow ur thread..
You said about debit spreads and credit spreads..
Pls elaborate them...
thx & regards

I will keep it simple. You can anyway Google and find more details.

First of all a Spread - Buying a Pair rather than trading naked options - You could have horizontal spreads or Vertical Spreads
Horizontal - Buy/Sell a pair in PE AND CE - Normally unlimited risk and Unlimited profit
Vertical - Buy/Sell a pair in PE OR CE - Normally Limited Risk and Limited profit

When the VOLT will increase or when the market is Trending, Normally we Buy Debit spreads. It is called Debit spreads because money is debited from your trading account (money goes out). When you square off at a higher price, the money comes back. But initially money goes out, So it is a Debit spread.
for example when the market was at 5500 and you thought market would go UP, you could have BOUGHT (DEBIT) a 5500CE and a 5500PE and close the positions when the market reached 5800 with profit

When the market is in Sideways or you feel that the VOLT will come down after a Run UP, Like what happened in SEP-13 when market Ran from 5500 to 5800, it is Better to go for Selling Options. When you Sell options, you get money in your trading account.
For example on Monday when the market was around 5900 and trading sideways, you can could have SOLD - (CREDIT) 5900PE and 5900CE for around 175 and if you had closed today you would have made a profit of 100 points in just 2-3 days.


When you are trading Pair where you can buy one strike and Sell one strike and if the net value is a Credit, then also it is called a Credit Spread.

 

[appajib]

Raj bhai,

Thank u very much for ur kind reply

 

[prabhsingh]

Guys,

Have a look at weekly chart of Reliance.It seems its forming Horizontal Descending Triangle.Levels given in the pic.Thoughts Welcome.

 

[Rish]

Guys,

Have a look at weekly chart of Reliance.It seems its forming Horizontal Descending Triangle.Levels given in the pic.Thoughts Welcome.
[/IMG]

:thumb::thumb::thumb:

Reliance immediate target 782 not ruled out, let us see....

 

[arcus]

I will keep it simple. You can anyway Google and find more details.

First of all a Spread - Buying a Pair rather than trading naked options - You could have horizontal spreads or Vertical Spreads
Horizontal - Buy/Sell a pair in PE AND CE - Normally unlimited risk and Unlimited profit
Vertical - Buy/Sell a pair in PE OR CE - Normally Limited Risk and Limited profit

I am not sure what you are trying to describe but those are not horizontal/vertical spreads.

Horizontal spread is also called a calender spread. They legs have the same strike price, same type but different expirations. For example, Buying a 5800 August PE and selling a 5800 October PE is an example of a horizontal spread.

Vertical spreads have different strike price, same type and same expiration. It involves the bull call spread, bear call spread, bull put spread, bear put spread, etc.

When the VOLT will increase or when the market is Trending, Normally we Buy Debit spreads. It is called Debit spreads because money is debited from your trading account (money goes out). When you square off at a higher price, the money comes back. But initially money goes out, So it is a Debit spread.
for example when the market was at 5500 and you thought market would go UP, you could have BOUGHT (DEBIT) a 5500CE and a 5500PE and close the positions when the market reached 5800 with profit


When the market is in Sideways or you feel that the VOLT will come down after a Run UP, Like what happened in SEP-13 when market Ran from 5500 to 5800, it is Better to go for Selling Options. When you Sell options, you get money in your trading account.
For example on Monday when the market was around 5900 and trading sideways, you can could have SOLD - (CREDIT) 5900PE and 5900CE for around 175 and if you had closed today you would have made a profit of 100 points in just 2-3 days.

That is correct.

Debit spreads are in which you pay money first and get more money afterwards.

Credit spreads are where you get money first and keep it.

 

[ss16021981]

today i have download oat v1.2 from the link pls guide how to use it by giving update time to time tks

 

[ss16021981]

sir pivot is showing 5849 is it future or spot price

 

[anup]

premiums have come down to 50.. Lets see, how it goes