NIFTY Options Trading by RAJ
- Thread starter healthraj
- Start date
- Tags nifty options chain raj oat
I think there has been some healthy discussion on Rule 4. Thanks to all who contributed. While I agree that Volume is in Terms of Contracts, I have not seen anywhere if the OI/COI is expressed in terms of Quantities. It would be good if people can provide some documentation on how to ascertain that the OI/COI is expressed as Quantities and not contracts/lots.
But just to be on fair on both sides since we have a doubt on OI/COI, We can modify the Rule in 4 to say that Pick the Strike where the Volume is the max. But so far my analogy also has worked.
For eg. Today if you see on the CE side 6300 CE is the only strike with more than 100%. So today 6300 CE should have given the MAX Profit compared to all other CE Strikes. Where as in PE, If I take the MAX Vol, it is at 6000PE. so selling 6000PE should have given the max profit in terms of SELL
But just to be on fair on both sides since we have a doubt on OI/COI, We can modify the Rule in 4 to say that Pick the Strike where the Volume is the max. But so far my analogy also has worked.
For eg. Today if you see on the CE side 6300 CE is the only strike with more than 100%. So today 6300 CE should have given the MAX Profit compared to all other CE Strikes. Where as in PE, If I take the MAX Vol, it is at 6000PE. so selling 6000PE should have given the max profit in terms of SELL
I think the IT Stocks are Tired now. The Banking stocks should help NIFTY make a Top of around 6250, which would be 240 points from our MAX Pain of 6000
BANKNIFTY Resistance is at 11000. BANKNIFTY now trading some 3% below RESISTANCE. So another 3% possible for BANKNIFTY, which would roughly help 1.5% for NIFTY, which is another 80-90 points in NIFTY, which should take NIFTY to around 6230-6240, which would also be 240 points from the MAX PAin of 6000.
So those who are holding the 6000-6200 Pair, Try to get out at Cost. With the Current VOLT, I don't think we will be able to make profit in this pair but we should be able to Get out at cost. Those who want to Take a Little bit of Risk Can try Closing 6200CE around 100-120. Since the MAX Pain is at 6000 and the MAX Pain was not touched in the last down movement, it would be definitely Tested and So you can also the 6000 PE when the market moves down. that way we should be able to make some profit. Those who do not want to take any risk, Close the Pair at cost and go for another pair probably 6100PE-6300CE when the market is at 6230-6250.
Do not miss the opportunity to Go short when the market is above 6200+. Unless MAX Pain which is at 6000 changes to a Higher value., Go short for a Target of 6000.
BANKNIFTY Resistance is at 11000. BANKNIFTY now trading some 3% below RESISTANCE. So another 3% possible for BANKNIFTY, which would roughly help 1.5% for NIFTY, which is another 80-90 points in NIFTY, which should take NIFTY to around 6230-6240, which would also be 240 points from the MAX PAin of 6000.
So those who are holding the 6000-6200 Pair, Try to get out at Cost. With the Current VOLT, I don't think we will be able to make profit in this pair but we should be able to Get out at cost. Those who want to Take a Little bit of Risk Can try Closing 6200CE around 100-120. Since the MAX Pain is at 6000 and the MAX Pain was not touched in the last down movement, it would be definitely Tested and So you can also the 6000 PE when the market moves down. that way we should be able to make some profit. Those who do not want to take any risk, Close the Pair at cost and go for another pair probably 6100PE-6300CE when the market is at 6230-6250.
Do not miss the opportunity to Go short when the market is above 6200+. Unless MAX Pain which is at 6000 changes to a Higher value., Go short for a Target of 6000.
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Hope you are talking about Rule #4. Rule #4 should help you choose a Strike Price to Trade. Depending on the Trend of the market, If you want to Buy or Sell, you have to choose a Strike. So today the Volume Vs COI gives 6300CE as more than 100%. So tomorrow if the market is DOWN you can apply the same logic for choosing a PE. But the point for Discussion was that COI and Volume in Options Chain table are not expressed with the Same units (Quantities Vs Lots).
So given the above confusion, I am simplifying the Rule saying, If you have decided to Buy CE, then choose the Strike with MAX Volume which would be 6200 CE today. But as per original logic you would have chosen 6300 CE instead of 6200 CE. Today If you want to SELL Put, Then the MAX PE volume is at 6100 PE and so SELL 6100 PE.
If you know what strikes to choose for Option Trade, then one can ignore this Rule.
One more myth was before Jul-13 I was always using Volume to Decide the Trend of the market, But where as after analysis for Intraday I use COI for Trend and Volume just for choosing the Strikes. I hope it is clear.:thumb:
So given the above confusion, I am simplifying the Rule saying, If you have decided to Buy CE, then choose the Strike with MAX Volume which would be 6200 CE today. But as per original logic you would have chosen 6300 CE instead of 6200 CE. Today If you want to SELL Put, Then the MAX PE volume is at 6100 PE and so SELL 6100 PE.
If you know what strikes to choose for Option Trade, then one can ignore this Rule.
One more myth was before Jul-13 I was always using Volume to Decide the Trend of the market, But where as after analysis for Intraday I use COI for Trend and Volume just for choosing the Strikes. I hope it is clear.:thumb:
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