NIFTY Options Trading by RAJ

[ss16021981]

now again pivot @5859

 

[gsn57iaf]

Where to search for volatility index of individual stock? Thanks.

 

[prabhsingh]

Head & Shoulder pattern getting formed on Daily and Hourly charts.If this is true then market has to drift downwards coming close to 5800 levels.

I think next week this market can fall towards 5738-5750 levels because:

a) 5750 is 0.382 retracement levels from 5120-6143 levels (SPOT)
b) On daily charts,Left Shoulder value is 5738 levels hence if H&S has to form then right shoulder value should come close to 5738 levels.

Lets see if this holds true.Thoughts Welcome.

 

[healthraj]

I don't know... Y everybody is talking about expirey? Itz juz a... Start...

With INFY you can always play two Trades. one is the Debit Spread running upto the Results Day. And the other is the Credit spread on or before the Results day. Yes for the Debit spreads you might think it is too early but already the IV is at 55-60%. The AVG IV for INFY is only 35%. So it had already done 15% more. So I am just hoping that it would repeat the previous result where the IV ran upto 90% and on the result day the IV dropped to 30% and killing all the CE and PE holders.

 

[healthraj]

I think next week this market can fall towards 5738-5750 levels because:

a) 5750 is 0.382 retracement levels from 5120-6143 levels (SPOT)
b) On daily charts,Left Shoulder value is 5738 levels hence if H&S has to form then right shoulder value should come close to 5738 levels.

Lets see if this holds true.Thoughts Welcome.

WITH the MAX OI at 5700-6000 and the market coming down from 6000, yes 5700 is very much possible. And also since the NF Premiums are very high at 60, the only way it can be brought down is by Selling.

 

[healthraj]

Where to search for volatility index of individual stock? Thanks.

There are two Volatility. The Historic VOLT, which is the Volatility of the Stock or Futures, which you can find in the OAT tool in the cell "J19", which I get from the NSEIndia.com link. For example if you want to get today's date

http://www.nseindia.com/archives/nsccl/volt/FOVOLT_27092013.csv

- Which is also available in the OAT tool in the hidden sheet FOVOLT.

The other is the Implied Volatility (IV) for the individual strikes, which you can get from the options Chains table.
In the OAT if you are tracking a strike then in the "Tracking Positions" section, you can input the strike, choose the option type and it will fetch the IV. Or you can look at it directly in the SODATA sheet

 

[healthraj]

sir till now pivot was showing 5860 jut it change to 5895 can u throw light on it

now again pivot @5859

The Intraday Pivot is an average of the MAX COI (Change in Open Interest) which is at 5200-6100. So the avg of 5200 and 6100 is 5650. I do some massaging based on the "Change in Open Interest" and give you 5641 instead of 5650. When the COI changes the Pivot also changes.

The positional Pivot is based on the MAX OI - which is at 5700-6000, which would be 5850, once again which is massaged to 5858. The reason for providing the Positional Pivot is also to do some Positional trades. If 5850 is broken on the downside then one can SELL and vice versa.

So you have to use the Pivot more as Support and Resistance levels - for which I cannot put any definite rules. But you can always place your trades towards the Intraday Pivot.

For Intraday one more important point is that the COI should be in a tight range, then only indicates a Trend. For example if the market is at 5900 and if the COI is 5800-6000 or 5900-5900 or 5800-5900 then it indicates that the BEARS and BULLs are creating positions and fighting at the current levels. When the Range is something like 5200-6100 as you see in the tool today EOD, then that indicates that the Operators are selling those levels to eat premiums or it also indicate that the market might be going into Sideways for sometime. On Monday for any real trade in any direction you should get the MAX COI at 5800-6000 or 5900-5900 or 5800-5900 or 5700-5800 etc...

Assume that all the Pivot values are Future Values

 

[healthraj]

sir when nf made low @ 12.15 5500put made a high of 52.55 but now nf had break that low put is trading @ 50.95 y so

Because the VOLT has dropped

 

[gmt900]

Please use the MAX Pain only for taking positional Trades or during Expiry.

For Positional trades if the current NIFTY value is away from MAX Pain by around 4%-5% (240-300 points in NIFTY), then take a Trade which will lead you to the MAX Pain. The Expiry strategy we covered in the last 4 days.

Otherwise do not give much importance to MAX Pain. The Series is just now starting.

There was may be one more observation which people can use to take positions at the end of the Expiry.

At the end of the AUG-13 expiry, the AUG-13 MAX Pain was at 5400 but the SEP-13 MAX Pain was at 5500. Which indicates that the SEP-13 will go up. So somebody could have taken a BUY call.

Similarly At the end of the SEP-13 Expiry the MAX Pain of SEP-13 was at 5850-5900 but the OCT-13 MAX Pain was at 5800. So somebody can start the Series with a SELL call.

I don't know if it works always. It is just my observation. So people need to observe and build their own system based on the OptionsChain data.

Hi Raj,
I wonder whether there is a way to backtest the effect of Max Pain during five trading days prior to expiry on the closing price of nifty at expiry. I mean, if the change in theMax Pain is in a narrow band during that period, one can use Max Pain for taking a spread or a pair position.
As I posted earlier, it helped me take a long butterfly position four days prior to expiry in Sept series.
Thanks and regards,
gmt 900

 

[gmt900]

Playing for the INFY Results.

INFY like last time the VOLT is going UP. So those who are interested can buy Debit Spread. Today I saw both the CE and PEs price have gone up but INFY has not moved anywhere.

Close the INFY debit spread before the Result day and Just before the result day better take a Credit Spread.

Last time the VOLT went to HIGHs of around 90. INFY AVG VOLT is only around 30. On the day of result the VOLT dropped from 90 to 30.

Those who want to take risk can try this call. Otherwise wait till the last day before the result.

The Suggested Debit spread would be 2600 PE - 3500 CE Available now at 111. THOSE who are taking this call Please keep a watch on the IV. As long as the IV is going UP, it would help the CALL.

Do you mean 2600PE/3500CE long straddle could be bought @ around 111 and close it just before result and sell 2600PE/3500CE short strangle on the day before result?