NIFTY Options Trading by RAJ

[healthraj]

HI Raj,

At what time of interval you check the option chain data as the data gives at a time give bullish signal and after 5-10 mins it gives bearish signal.

Today the MAX CHG in OI was not within a tight Range. It was most of the time trading with a broad range of 5600-6000. The MAX CHG in OI should be looked at only for taking the Intraday positions. When I said the market was looking bullish I was tkaing the OVERALL CHG in OI. Once again as I mentioned before, To me OVERALL means the ATM strike (5800)+2 OTM strike + 2 ITM Strikes.

So if we take the strikes from 5600, 5700, 5800, 5900 and 6000, the Sum of the CHG in OI indicates a Bullish trend. Overall CE @ 12.1L Overall [email protected]. Remember in the morning the CE was at 12L and it closed with 12L. But PE has increased significantly from 3L to 15L, the reason for mentioning as Bullish. The market to me closed with a Bullish signal.

Let us see tomorrow what happens

 

[healthraj]

17l added in calls and 9l in puts (5800-6200) and you are still bullish?

As by 3.20 option chain suggest bearish signal

May be I have to take the CHG in OI for all the strikes. Anyway Let us see if my logic works for tomorrow. I took the ATM+ 2 ITM + 2 OTM.

 

[healthraj]

So Today I have gone for a little bit of Risk in NIFTY looking at the Bullish Signal

Open positions

SBIN 1700PE-1900CE Pair - Sold at 92.75 - The Trend is indicating a Bear. But the MAX OI and MAX Pain is at 1800. So I am hoping for a Rally tomorrow.

INFY - 2800PE - Bought at 31.25 on 26-Jul-13. EOD Price is 31.45.

NIFTY - Today instead of Pair I have bought 5900 CE @ 105.9 and 6100CE @ 34.8 - NIFTY Closed with a Bullish signal

 

[gmt900]

Tomorrow RBI Policy is Due. So we can play before and After the RBI policy.

The MAX Pain is @ 5900. Those who want to take the Max risk can Sell 5900PE.

Those who wanto take less Risk can sell the 5900CE/PE pair or can sell 5800-6000 Pair. Today the signal has turned Bullish and so if there is a Reversal then 5800-6000 Pair would definitely give the Result.

Those who want to Trade naked positions, Other than 6000Ce, you can Go Long any CALL. And you can sell any Put. Better to Sell 5800PE because MAX OI at 5800PE. All this with the Assumption that Market will be UP tomorrow

Raj,
I would like to understand this a liitle more clearly. Today at EOD the max pain was at 5900. Based on the total CHG in OI, there is a bullish signal.
Which of these two criteria is more important for taking a position?
I mean, if max pain is more important one, should sell 5900 C/P pair. If bullish signal is more important, one should sell 6000C/5800P pair.
Please clafify.

 

[gmt900]

So Today I have gone for a little bit of Risk in NIFTY looking at the Bullish Signal

Open positions

SBIN 1700PE-1900CE Pair - Sold at 92.75 - The Trend is indicating a Bear. But the MAX OI and MAX Pain is at 1800. So I am hoping for a Rally tomorrow.

INFY - 2800PE - Bought at 31.25 on 26-Jul-13. EOD Price is 31.45.

NIFTY - Today instead of Pair I have bought 5900 CE @ 105.9 and 6100CE @ 34.8 - NIFTY Closed with a Bullish signal

I think there is a bit of a violation of the basis on which we are supposed to be trading as per this thread. Writing a pair would be safer than buying call options.

 

[healthraj]

Raj,
I would like to understand this a liitle more clearly. Today at EOD the max pain was at 5900. Based on the total CHG in OI, there is a bullish signal.
Which of these two criteria is more important for taking a position?
I mean, if max pain is more important one, should sell 5900 C/P pair. If bullish signal is more important, one should sell 6000C/5800P pair.
Please clafify.

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I think there is a bit of a violation of the basis on which we are supposed to be trading as per this thread. Writing a pair would be safer than buying call options.

GMT,

I am not sure about the MAX Pain. I have seen it working when we were close to the Expiry last month. So that way we are still experimenting. so I think in this case the "bullish" signal is more important. So we should sell 5800-6000 pair.

Thanks for highlighting the violation. So it is the Greed which has overtaken my fear. For the benefit of others, I will stick to the basic Pair trading.

If I am right, Selling the 5900CE/PE is called Strangle in the Options nomenclature for which the VOLT should be HIGH. So I think we are better off trading 5800-6000 Pair

GMT, What did you trade ?

 

[gmt900]

GMT,

I am not sure about the MAX Pain. I have seen it working when we were close to the Expiry last month. So that way we are still experimenting. so I think in this case the "bullish" signal is more important. So we should sell 5800-6000 pair.

Thanks for highlighting the violation. So it is the Greed which has overtaken my fear. For the benefit of others, I will stick to the basic Pair trading.

If I am right, Selling the 5900CE/PE is called Strangle in the Options nomenclature for which the VOLT should be HIGH. So I think we are better off trading 5800-6000 Pair

GMT, What did you trade ?

I used the limited knowlege I have acquired in this thread and wrote 6000/5800 pair for 150 points. I thought even if I have to incur loss, it will be minimum wth this pair.

 

[healthraj]

30-Jul-13

The Range for today is the same as Yesterday. 5870-5930 with 5900 as the pivot. If 5930 breaks then you can look for another 50 points.

 

[healthraj]

30-Jul-13

The Range for today is the same as Yesterday. 5870-5930 with 5900 as the pivot. If 5930 breaks then you can look for another 50 points.

Options update @ 9:30 AM
MAX CHG in OI in all over the places...
Overall CHG in OI indicates a BULLISH .
MAX OI still 5800-6000.
Today it would be very volatile.

Our Pair positions 5800-6000 - Did not move anywhere. Same at 148. For the positions to be in profit either the market need to move or the VOLT needs to come down

SBIN 1700PE-1900CE - Opened at 92.75. now trading at 87.15. - 5 points profit because the VOLT has come down from 42 to around 40. Just 2% drop 5 points profit. If it further comes down and if the SBIN moves UP then the profit will be maximum. So keep a check on the VOLT.

BANKNIFTY - Which is the focus for today. The PEs are getting squared off and still indicating a WEAK BEAR. So still not OK to buy.

 

[gmt900]

30-Jul-13

The Range for today is the same as Yesterday. 5870-5930 with 5900 as the pivot. If 5930 breaks then you can look for another 50 points.

Will you please explain how you decide the range by looking at the option chain ?
Sorry, I have missed it if you already explained it.
The pivot, I suppose, is calculated as per the standerd formula.