NIFTY Options Trading by RAJ

[Option.Trader]

Thanks for enlightment...

Like Raj said, it's better to take deep ITM on expiry, what I did was a bit closer to gambling. But if you take 5920/30 as the resistance, you would have been better off with 5950 puts. It doubled and stop loss was very near. Note to myself, don't get enamoured by penny options, it will sooner than later make you penny

 

[healthraj]

@2:45 The bad news comes 15 minutes before close and the MAX Pain changed to 5900
@2:49 The MAX Pain changed to 5850. Those who are holding Puts would be glad to see this change.
@2:54 The MAX Pain changed to 5900.
@2:58 The MAX Pain changed to 5850

It is really becoming an interesting climax to this SEP-13 cycle... I mean we giving so much importance to MAX Pain and it is changing every 2 minutes

Since the MAX Pain was swinging between 5850 and 5900 - the market settled for the average and closed at 5882.

 

[healthraj]

Policy of not updating the change in OI in real time

OK. Is it ? So in India we are lucky then

 

[healthraj]

Ha ha ......just remember not to trade on expiry day....

Stop at 16.5/- ......, Sudden rise up to 25/- but immediately falling....! Ultimately CAPITAL LOSS (Including Higher STT warning from ZERODHA)...!

Moral for me:- AVOID Week end market...!

Closed my Terminal

We have to always Learn from the market. Most of the time in the last 4 days of expiry the Credit Spreads should give you profit. While I am saying this in Retrospective, I also took 5900PE @ 20 today and closed with a Loss of 4 points.

Just from continuous learning perspective, My observation of the last 5 days of expiry is as follows.

See if the Friday before the Expiry if there is a BIG Move and goes near the MAX Pain - If yes Buy the Credit Spread. Like for this month the MAX OI on Last Friday (5700-6000 Pair) was around 36 and today it closed at Zero.

If Friday there is no BIG move, then you can expect the BIG move on Monday and you take the Credit Spread on Monday EOD.

For example for this month, Last Thursday and Friday were BIG moves. On Friday the MAX Pain was at 5900 and so If somebody had taken CREDIT (SOLD) spread of 5900PE-5900CE then it would have given a profit of around 150 points. Or if somebody taken 5700-6000 Pair at 40 it would have given 40 points.

Let us try to remember this for the OCT-13 expiry.

Others who want to try this can backtest it for the past months.

 

[VJAY]

We have to always Learn from the market. Most of the time in the last 4 days of expiry the Credit Spreads should give you profit. While I am saying this in Retrospective, I also took 5900PE @ 20 today and closed with a Loss of 4 points.

Just from continuous learning perspective, My observation of the last 5 days of expiry is as follows.

See if the Friday before the Expiry if there is a BIG Move and goes near the MAX Pain - If yes Buy the Credit Spread. Like for this month the MAX OI on Last Friday (5700-6000 Pair) was around 36 and today it closed at Zero.

If Friday there is no BIG move, then you can expect the BIG move on Monday and you take the Credit Spread on Monday EOD.

For example for this month, Last Thursday and Friday were BIG moves. On Friday the MAX Pain was at 5900 and so If somebody had taken CREDIT (SOLD) spread of 5900PE-5900CE then it would have given a profit of around 150 points. Or if somebody taken 5700-6000 Pair at 40 it would have given 40 points.

Let us try to remember this for the OCT-13 expiry.

Others who want to try this can backtest it for the past months.

Good information ...thanks raj:thumb:

 

[Option.Trader]

We have to always Learn from the market. Most of the time in the last 4 days of expiry the Credit Spreads should give you profit. While I am saying this in Retrospective, I also took 5900PE @ 20 today and closed with a Loss of 4 points.

Just from continuous learning perspective, My observation of the last 5 days of expiry is as follows.

See if the Friday before the Expiry if there is a BIG Move and goes near the MAX Pain - If yes Buy the Credit Spread. Like for this month the MAX OI on Last Friday (5700-6000 Pair) was around 36 and today it closed at Zero.

If Friday there is no BIG move, then you can expect the BIG move on Monday and you take the Credit Spread on Monday EOD.

For example for this month, Last Thursday and Friday were BIG moves. On Friday the MAX Pain was at 5900 and so If somebody had taken CREDIT (SOLD) spread of 5900PE-5900CE then it would have given a profit of around 150 points. Or if somebody taken 5700-6000 Pair at 40 it would have given 40 points.

Let us try to remember this for the OCT-13 expiry.

Others who want to try this can backtest it for the past months.

So would you wait for a big move before taking credit positions? If not(no big move), naked options towards Max pain sounds reasonable

 

[healthraj]

So would you wait for a big move before taking credit positions? If not(no big move), naked options towards Max pain sounds reasonable

Yes you are right. It is another good way of looking at it instead of saying BIG Move etc.. So take naked positions towards the MAX Pain (which normally happens the last Friday or Monday or Whatever day) and then immediately go for Credit Spreads at the MAX Pain strikes. This Single Strategy every month should give at least 20% profit.

So somebody can come up with Strategy like TTM (Two Trades in a Month)

But like in this month what happens if the MAX Pain keep on Changing? In this month I think anyway it did not really matter because anyway the market stuck to the original MAX Pain of 5900. So the MAX Pain that we got after the BIG move was a Fake one...

 

[healthraj]

Two Expiry months covered in this thread.

So this Thread has crossed exactly two months now and covered two Expiry cycles. Thanks to all who contributed in every small way. Do you think we have learnt enough to put together a simple document so that we can make money out of it?

Please contribute your key learning and key strategies so that we can all learn from it.

 

[healthraj]

VJAY's thread on "Journey with OPTIONS"

note: I am posting the comments here because VJAY's thread is a read only thread.

VJAY thanks for starting a new thread and recording the OPTION data at the end of the day for NIFTY. So if the trades you have taken for SEP-13 were real trades then the Credit spreads of 5900Ce-5900PE should have given max profit today. So VJAY can share with us why he took the 5900CE-5900PE pair.

For the other pair 5800CE-6000PE, Actually it should have been 5800PE-6000CE. The CE and PE should have been reversed or since the MAX OI was at 5700PE-6000CE pair it could have been the credit spread of 5700-6000 pair also.

Anyway good prediction and good Credit spreads

For other who do not know which thread I am talking about, below in the link
http://www.traderji.com/members-discussion-forums/89938-journey-options.html#post869556

 

[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.

The Premium for NIFTY Futures are still HIGH. OCT-13 at 62.8 and NOV-13 @ 98. So get ready for some VOLATILE Sessions in the coming days until the Premium comes down to say 30.

The INDIAVIX also has come down slowly from 27 to 26.7 to 25.7 to 24 in the last four days.