NIFTY Options Trading by RAJ

[toocool]

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.

the max pain point will always always always be looked by looking at spot price , no exceptions .

because the spot closing on expiry day decides the destiny of all futures and option chain of the UNDERLYING . for example if someone buys 6000 nifty ce for rupees 1 per lot , nifty spot has to close 6001 for him to be at par (excluding the charges,brokerage etc) , so there should not be any confusion on that . underlying decides the MAX PAIN.

 

[Cubt]

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.

arcus,

Could you please tell how do we use this tool to perform the following calculation?

1. How to predict the Call/Put price, if there is a 5% increase in SPOT. Say, Infy 3200 Call is @ 140 and VOLT is @ 60. I want to predict the price of this option if there is a 5% movement. how do we do this?

 

[Option.Trader]

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.

Well, it may or may not touch 6140, but I didn't feel there was a short trade. Closer to 6140, rr seems better, anyway my 2re

 

[arcus]

arcus,

Could you please tell how do we use this tool to perform the following calculation?

1. How to predict the Call/Put price, if there is a 5% increase in SPOT. Say, Infy 3200 Call is @ 140 and VOLT is @ 60. I want to predict the price of this option if there is a 5% movement. how do we do this?

Its very easy but you have to assume 3 things.

1) Which day?
2) What may be the IV?
3) What may be the spot price?


In the above screenshot,
the answers to the above 3 questions were

1) Today
2) 40
3) 3280 (around 5% upmove from yesterday).

 

[VJAY]

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

Dear raj,
where from you getting this 240 points?
5700-6100=400/2=200 points...so for this 240 you taking --50 strikes?

 

[singlap]

Should banknifty touch 11000 now ? what is the max pain ?

 

[healthraj]

Dear raj,
where from you getting this 240 points?
5700-6100=400/2=200 points...so for this 240 you taking --50 strikes?

Today the NIFTY opened at 6141. IF NIFTY Should expire at 5900 (MAX Pain), then the premium will become Zero and Futures Price would be 5900. So 240 is difference between the Futures Prices of 6141 and 5900.

 

[healthraj]

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

Yes it is quite possible.

 

[healthraj]

Should banknifty touch 11000 now ? what is the max pain ?

Yes today the MAX OI BANKNIFTY once again moved from 10000 to 11000. So 11000 should be possible. But the MAX OI keeps switching between 10000 and 11000. So trade with Caution. MAX Pain at 10100 - Moved UP by 100 points from Yesterday

 

[Option.Trader]

Yes the Data is available. But I thought the normal candlestick charts are anyway available in the public domain.

Well you get to see 1 min for day not historically, but the ability to view data for 5, 10, 15, 30, hourly with the data downloaded already, would be really helpful, without pivots, just data as is