NIFTY Options Trading by RAJ

[Cubt]

Dear CUBT,

Don't worry. The opportunity comes every quarter. Start preparing for next good counter TCS & surly you can recover good amount there.

Yeah.. before that i need to read this thread completely and i should learn the price movement when VOLT is high/low, which strike price i should choose when i buy Calls/ which strike price i should choose when i buy puts.

The pairs i should choose when i write options, after all i need to understand how much margin i need in my account to write options. Let me 1st learn this from Raj's thread.

 

[VJAY]

Dear raj,
you mean avrage VOLT is orginal VOLT?
suggestion in your next ver of OAT...
pls include OHLC of NF index like you had for futures in sheet
include daily chart ..like now for intraday chart...(60/10..etc)..i think its help for positional
can you include some more strikes in options chain window
to get correct optionpain value (requested earlier)...

 

[Option.Trader]

No I calculated 240 points from MAX Pain 5900+240 = 6140. The MAX OI is at 6100.

People should be stunned on seeing how the market is behaving right now. But you would have seen NF opening exactly at 6141 and fallen by more than 60 points. That is how the MAX OI and MAX Pain works.

Exactly my point, 6141 is still some distance in spot, so your above comment of falling from 6141 from nifty futures will not be a result of max pain as the 240 points are wrt spot

 

[healthraj]

Dear raj,
you mean avrage VOLT is orginal VOLT?
suggestion in your next ver of OAT...
pls include OHLC of NF index like you had for futures in sheet
include daily chart ..like now for intraday chart...(60/10..etc)..i think its help for positional
can you include some more strikes in options chain window
to get correct optionpain value (requested earlier)...

No the AVG volt of INFY is in my head. For simplicity you can take the AVG Volt and Historic Volatility which is calculated based on the Stock / Futures movement, which you can see in OAT as 28.5%, which should also be the normal AVG IV for options also. For example the HIST VOLT OF NIFTY is 22% and the normal IV for NIFTY Options at least for CEs should be 22% (Only then it is good to Buy).

I will look at your suggestions for OAT. The Tool is becoming very cluttered and is becoming a more general Tool. So I will have to take decision on what to include?

 

[singlap]

The MAX Pain could be either 5850, 5900 or 5950. It could not be at 5920.
Yes if MAX OI does not change to higher than 6100, then it would act as the Resistance and it would be a SELL. In the morning the market opened at 6105 and it crashed to 6047 and now trading at 6080. But you have to be careful because the Largest COI is at 6200 - 10L. So market might want to Test 6200NF

Raj , Now the COI @ 6200 is 8.8 L(gone down from 10L). Does this indicate anything ? ie. market may not test 6200 ? just to understand things better

 

[healthraj]

Exactly my point, 6141 is still some distance in spot, so your above comment of falling from 6141 from nifty futures will not be a result of max pain as the 240 points are wrt spot

OT, I agree. But my point is you can still SELL at 6100 and have 6140 as the Stoploss or Average at 6150. What if Market does not goto 6140? You would have missed 6100 also. So it is a Choice. But the MAX Pain / MAX OI is a SPOT or Futures price, I am still not clear. May be I have to consciously look at it.

If you look at this Series, NIFTY SPOT touched around 5700 but the Futures did not and I was hoping that the Futures would also touch 5700 and I missed the chance to BUY (In fact I was holding the Short positions and lost). The reason why I short at 6100 SPOT itself. As I said if it goes to 6140, we can still average our Short positions. Even if you play at 6100, when the market touches 5900 (MAX Pain) NIFTY would have anyway lost the 40 points premium and you will still make 240 points. So it is a question of whether you want to make 240 points or 300 points.

 

[healthraj]

Raj , Now the COI @ 6200 is 8.8 L(gone down from 10L). Does this indicate anything ? ie. market may not test 6200 ? just to understand things better

All that matters between 6100 and 6200 is 6100 is bullish and 6200 is Bearish. So today 6100 might be crossed But it might not cross 6200. If 6200 is coming down then it might be some weakness or may it indicates 6150 as the top

 

[arcus]

For sure, tomorrow Infy is not going to be flat tomorrow. There is going to be a movement of at least 5%.

If 5% up I gain around 20k in Futures but am not sure how much depreciation will be there for PUTS.

Confused!!

If there is a 5% upmove from yesterdays close, the depreciation would basically leave the puts worthless.

After the IV crunch, the OTM puts would lose around half of their IV. From around 75, they would fall to 35-40.

Always use a options calculator for your positions. You probably lost more than 70,000 on this trade because of lack of knowledge of options pricing.

 

[healthraj]

Europe Futures which was in Green is suddenly gone to Red. So be cautious on Longs. Better to close the Longs and Trade after Europe opening.

 

[Cubt]

Raj,

As per the Infy options, it shows MAX OI 3500-2700 and Max Pain @ 3150.

Since Infy has already crossed Max Pain of 3150, does it indicate that it is heading to 3500?

As am holding Infy Futures from 3150, I would like to know if its wise to keep 3150 as stop loss and hold it for target of 3500?

It would be great if you could provide ur inputs