NIFTY Options Trading by RAJ

[healthraj]

I may be wrong, but I am betting on NS not moving substantially closer to 6000 or 5800 on monday /tuesday and then take a call. I am looking for a profit of about 10-12 points and at the same time hedge the position in case of a wild swing.
Since I don't have a software to analyse this, I am using maths to take this trade.

I did some calculation. You are right. The MAX Profit is just 11 points. So I closed everything. I am going to avoid taking this 4 strike stategy. At some point I was confused whether I sold the correct strike or not.

Need to work on simple stretegies. Will need to do some reading this week end.

Can anybody recommend some simple books for simple stategies - My main criteria is "Limited" risk with "Limited" Profit.

 

[gmt900]

I did some calculation. You are right. The MAX Profit is just 11 points. So I closed everything. I am going to avoid taking this 4 strike stategy. At some point I was confused whether I sold the correct strike or not.

Need to work on simple stretegies. Will need to do some reading this week end.

Can anybody recommend some simple books for simple stategies - My main criteria is "Limited" risk with "Limited" Profit.

Dan had recommended the following book ;
The option trader handbook- strategies and trade adjustments by
George M Jabbour and Philip H Budwick.
This has been uploaded by someone in one of the threads. I will try to send the link if possible.

 

[aimer]

Dan had recommended the following book ;
The option trader handbook- strategies and trade adjustments by
George M Jabbour and Philip H Budwick.
This has been uploaded by someone in one of the threads. I will try to send the link if possible.

gmt, do u have ebook or links of book on option and open interest...if , plz post it here...need some indepth reading in what health raj is working, coz if i know the basics can follow it properly...
thanks in advance...

 

[aimer]

When I wrote the message, it was looking as a Weak Bear. But the market finally closed as a STRONG BEAR.

Raj, just wanted to know how did u decide or on what assumptions u have written the above highlighted line...plz elaborate...

 

[healthraj]

Raj, just wanted to know how did u decide or on what assumptions u have written the above highlighted line...plz elaborate...

OK. It is my own logic. It need not be 100% Fool proof.

When Market was trading around 5930, I always take the 5 strikes for my calculation. So it would be ATM strike, 2 ITM strikes and 2 OTM strikes.

So it was 5700, 5800, 5900, 6000 and 6100.

For Each strike, I find what is the Trend, It could be either BULL, BEAR or FLAT.

I calculate the overall Trend using the Overall "CHG in OI:. Here the "Overall" means only my 5 strikes. So i don't consider what is happening below 5700 or above 6100.

The Trend came as "Bear". Then I count the number of "Bear". If it is more than 2 then I take it as a Strong Bear.

So today closing had

5700 - Bull
5800 - Bull
5900 - Bear
6000 - Bear
6100 - Bear

At the time I wrote as "Weak Bear", 5900 was indicating as "Bull" and you saw the market coming UP from 5908 to 5960...

That is when I asked to close the positions at 5945 and the market finally closed at 5927.

Today the CHG in OI at CE being added above 5900 (in 6000, 6100) was 19L.
Today the CHG in OI at PE being added Below 5900 (in 5700, 5800) was 16L.

The Overall CHG in OI at CE was 24L
The Overall CHG in OI at PE was 15L

MAX at the individual Strike level,
11.77L added at 6000CE
8.63L added at 5800PE

So base is being built at 5800PE, which would be anyway Tested.

 

[vssoma]

dear,
as of now closing banknifty....i am thinking to form a strategy for this couple of weeks or if time permits until expiry...is it a good idea

Buy BNF 11000 CE @ 181 one lot
Sell BNF 11100 CE @ 150 Two lots

below 11300 if BNF closes the profit 119 BNF points....

is it really a tension free trade?

 

[guptak03]

http://www.traderji.com/options/66083-put-call-options.html...
a similar kind of thread was started by columbs sir long back, i have requested him to be visiting this thread and share his view bcoz more the knowledge more will be accuracy .... :thumb

 

[columbus]

Today the CHG in OI at CE being added above 5900 (in 6000, 6100) was 19L.
Today the CHG in OI at PE being added Below 5900 (in 5700, 5800) was 16L.

The Overall CHG in OI at CE was 24L
The Overall CHG in OI at PE was 15L

MAX at the individual Strike level,
11.77L added at 6000CE
8.63L added at 5800PE

So base is being built at 5800PE, which would be anyway Tested.

Even 5500PE and 5400PE saw huge OI,today.May be due to LOW price of
options there.The sentiment is towards downside.

 

[aimer]

OK. It is my own logic. It need not be 100% Fool proof.

When Market was trading around 5930, I always take the 5 strikes for my calculation. So it would be ATM strike, 2 ITM strikes and 2 OTM strikes.

So it was 5700, 5800, 5900, 6000 and 6100.

For Each strike, I find what is the Trend, It could be either BULL, BEAR or FLAT.

I calculate the overall Trend using the Overall "CHG in OI:. Here the "Overall" means only my 5 strikes. So i don't consider what is happening below 5700 or above 6100.

The Trend came as "Bear". Then I count the number of "Bear". If it is more than 2 then I take it as a Strong Bear.

So today closing had

5700 - Bull
5800 - Bull
5900 - Bear
6000 - Bear
6100 - Bear

At the time I wrote as "Weak Bear", 5900 was indicating as "Bull" and you saw the market coming UP from 5908 to 5960...

That is when I asked to close the positions at 5945 and the market finally closed at 5927.

Today the CHG in OI at CE being added above 5900 (in 6000, 6100) was 19L.
Today the CHG in OI at PE being added Below 5900 (in 5700, 5800) was 16L.

The Overall CHG in OI at CE was 24L
The Overall CHG in OI at PE was 15L

MAX at the individual Strike level,
11.77L added at 6000CE
8.63L added at 5800PE

So base is being built at 5800PE, which would be anyway Tested.

Thanks Raj, for a logical explanation...was waiting to get such an explanation which has cleared the doubts reagarding ur assumtion...just wanted to ask one more thing...from when will u start considering just OI for positional, coz u have considered change in OI now(earlier u had mentioned to consider it for intraday but since now as the new month has started there is not so much buildup in OI so may be not considering it now)
Also, when does the max pain comes in? at the time of expiry ?

 

[healthraj]

Even 5500PE and 5400PE saw huge OI,today.May be due to LOW price of
options there.The sentiment is towards downside.

Thank you Columbus Sir. Appreciate your valuable inputs and suggestions