NIFTY Options Trading by RAJ

[healthraj]

Nifty spot spiked above 5940. What would you recommend ?

I think it is a Buy and the Stoploss should be the Low made today which is 5913.5

 

[rrrajguru]

---deleted

 

[Gandhar.]

---deleted

already edited

 

[healthraj]

today low 5913.5?

In my terminal it is showing 5944.25 till now.

As per the Major Pivot low in SPOT it is 5913.5. I will post the chart at the end of the day

 

[healthraj]

This Week trading has been very Volatile. When I say Volatile it is not following the Technical or Fundamentals. I think we just need to Trade based on Levels. And the last two days if it opened Gap DOWN, it Reversed UP and if opened GAP UP, it reversed down. But still of one followed the Price action would have made some minimum profit. Like Today the SELL triggered below 5947 and made low of 5914 (25 points). And today was a BIG Flag formation.

For Tomorrow as per the Price action, if there is no GAP UP/DOWN opening then it would be BUY ABOVE 5950 or SELL BELOW 5914. 5914 or 5950 will act as the Stoploss based on the Call. My opinion is that Since it is not able to sustain 5950, it might go back and Test 5900 or 5850 (which is also the new MAX Pain). So at 5850 it should be an Opportunity to BUY

Today INFY just spiked to 3050 in the last 30 minutes of Trading. So may be we can expect some action in INFY tomorrow. The OAT also indicates a STRONG BULL for INFY. For INFY it would be BUY ABOVE 3055 and SELL BELOW 3025 - With 1% as the Stoploss. INFY has been Trading in a Tight Range for quite sometime now. In the Option Space, the VOLT has been going UP steadily but since INFY Stock is not moving anywhere, the Option Premium has been coming down. Hopefully it should change and INFY should give some profit for the Debit Spread holders in the coming two days. So Watch INFY on Tomorrow or Thursday for any opportunity in Debit Spread. If it breaks the Range of 3000-3060 Range, it should move at least 5%. to give an idea on the IV, the AVG IV for the last week was around 55% and today it closed at 65%. The normal IV for INFY is only 35%.

 

[gmt900]

This Week trading has been very Volatile. When I say Volatile it is not following the Technical or Fundamentals. I think we just need to Trade based on Levels. And the last two days if it opened Gap DOWN, it Reversed UP and if opened GAP UP, it reversed down. But still of one followed the Price action would have made some minimum profit. Like Today the SELL triggered below 5947 and made low of 5914 (25 points). And today was a BIG Flag formation.

For Tomorrow as per the Price action, if there is no GAP UP/DOWN opening then it would be BUY ABOVE 5950 or SELL BELOW 5914. 5914 or 5950 will act as the Stoploss based on the Call. My opinion is that Since it is not able to sustain 5950, it might go back and Test 5900 or 5850 (which is also the new MAX Pain). So at 5850 it should be an Opportunity to BUY

Today INFY just spiked to 3050 in the last 30 minutes of Trading. So may be we can expect some action in INFY tomorrow. The OAT also indicates a STRONG BULL for INFY. For INFY it would be BUY ABOVE 3055 and SELL BELOW 3025 - With 1% as the Stoploss. INFY has been Trading in a Tight Range for quite sometime now. In the Option Space, the VOLT has been going UP steadily but since INFY Stock is not moving anywhere, the Option Premium has been coming down. Hopefully it should change and INFY should give some profit for the Debit Spread holders in the coming two days. So Watch INFY on Tomorrow or Thursday for any opportunity in Debit Spread. If it breaks the Range of 3000-3060 Range, it should move at least 5%. to give an idea on the IV, the AVG IV for the last week was around 55% and today it closed at 65%. The normal IV for INFY is only 35%.

Looking at options data today, I thought that it may a good idea to go for short strangle. With nifty around 5925, I wrote 6100C for 86 and 5700P for 73.At the end of day 6100C is 80 and 5700 67,giving MTM profit of 12 points.
If nifty moves closer to 6100, I can convert 6100 C into debit spread by buying 6150C or 6200C. I plan to close trade when there is a 50% profit i.e.total of about 80 points.
For Infy, Debit spread is a good idea, though I will explore 3500C/2600P short strangle, long butterfly and long condor options too.

 

[healthraj]

Looking at options data today, I thought that it may a good idea to go for short strangle. With nifty around 5925, I wrote 6100C for 86 and 5700P for 73.At the end of day 6100C is 80 and 5700 67,giving MTM profit of 12 points.
If nifty moves closer to 6100, I can convert 6100 C into debit spread by buying 6150C or 6200C. I plan to close trade when there is a 50% profit i.e.total of about 80 points.
For Infy, Debit spread is a good idea, though I will explore 3500C/2600P short strangle, long butterfly and long condor options too.

Yes it was good decision for today to go for Credit Spreads. But on what basis you decided?

 

[wiseowl]

Looking at options data today, I thought that it may a good idea to go for short strangle. With nifty around 5925, I wrote 6100C for 86 and 5700P for 73.At the end of day 6100C is 80 and 5700 67,giving MTM profit of 12 points.
If nifty moves closer to 6100, I can convert 6100 C into debit spread by buying 6150C or 6200C. I plan to close trade when there is a 50% profit i.e.total of about 80 points.
For Infy, Debit spread is a good idea, though I will explore 3500C/2600P short strangle, long butterfly and long condor options too.

I agree with your idea. debit spread may not be required. however on the put side would have be comfortable at strike 5600. thus we can go till expiry. if notice for last three yrs in oct nifty was range bound with high vol and feel same is happening now thus disturbing TA. Max Pain I feel will be between 5900 - 5800

 

[columbus]

This Week trading has been very Volatile. When I say Volatile it is not following the Technical or Fundamentals. I think we just need to Trade based on Levels. And the last two days if it opened Gap DOWN, it Reversed UP and if opened GAP UP, it reversed down. But still of one followed the Price action would have made some minimum profit. Like Today the SELL triggered below 5947 and made low of 5914 (25 points). And today was a BIG Flag formation.

Most of the day indices were at bottom, however CALLS were seen in Premium over PUTS.
In last fifteen minutes or so ,Calls starting losing and turned Negative.Both Calls and Puts
have lost, in a small way.It will be like this till INFY results.

 

[gmt900]

Yes it was good decision for today to go for Credit Spreads. But on what basis you decided?

1. VIX was high @27.
2. Nifty is unlikely to cross 5700 and 6100 on the lower and upper side resply.
3. Delta was near zero.
4. In the event of a big nifty move on either side, there will be enough margin to take action to adjust the trade.
5. Premium of 159 points was decent.
6. Margin of 36,000 was reasonable for the premium collected.

Of course, market will decide what it wants to do. But I will not have to constantly monitor the trade.
Let's hope for the best.