NIFTY Options Trading by RAJ

[avny]

@ raj,
i am holding a pair of 6050 (CE+PE),short at 102

can u tell the possible adjustment,in case nifty goes >6100,or <6000

at present holding with a SL of 15 points

thanks

@ Raj,
kindly reply

thanks

 

[healthraj]

Dear Raj ,
Many a times i have seen that instead of obeying the OI and COI, the price obeys the IV !! Suppose the OI is indicating downside and IV of CE is less than PE, then the price goes up instead of going down !!
So, how should we judge the movement !!

Also ,please guide, how to interpret the volatility curve,intraday and positional pivots' curves given in the OAT !!

For eg. i am posting the OAT result for ARVIND !! where would the movement take place ??

God Bless U !!
Rgds !!

I think there are too many questions. So I will answer the question on IV.

Normally in a Real Good BULL market the IV for the Calls will be more than the Puts. Because traders do not mind putting more premiums for the Calls and so the IV also goes UP. But in a Trader's market, where we are in now, The retail participation is low and so the money is made by Selling options rather than by buying options.

So there are different types of markets where you have to apply different techniques. I always suggest a simple technique for those who want to Trade the pairs.

When you see the market in UP Trend (Look at 60 minute chart of Daily chart to find the current trend), Go for Credit Spreads (Selling Pairs). In the DOWN Trend market GO for Debit Spreads (Buy Pairs).

The Reason for the above strategy is that irrespective of whether the market is Real BULL or Trader's BULL, the IV in relative terms goes down when the market goes UP and the IV goes UP when the market goes down. Increase in IV helps Debit Spreads and Decrease in IV helps Credit spreads.

Right now we are in Trader's market. It is not a REAL Bull market....

AS I I have explained before, in a REAL BULL market if you see the VOLT trend chart, you will see a Tick mark pattern. And in the Real BEAR market you will see the Reverse of a Tick Mark Pattern. In a FLAT market, you will see a SMILE pattern.

The Reason it is not a REAL Bull market is from a Retail Trader perspective, Excepting the IT stocks all other stocks trading near the lows but still NIFTY index is trading near the Life time Highs. It is still my opinion as to call it "NOT A REAL BULL MARKET". I would leave the debate for others.

 

[healthraj]

@ raj,
i am holding a pair of 6050 (CE+PE),short at 102

can u tell the possible adjustment,in case nifty goes >6100,or <6000

at present holding with a SL of 15 points

thanks

AVNY, Looking at the MAX Pain NIFTY Seems to be suggesting that it might expire between 6050 and 6100. Because the MAX Pain in the last two days is shifting from 6050 and 6100. So my suggestion would be to Sell the 6100PE-6100CE Pair also.

Ideally I would have sold 6050PE-6100CE assuming the market would expire between 6050 and 6100

 

[avny]

AVNY, Looking at the MAX Pain NIFTY Seems to be suggesting that it might expire between 6050 and 6100. Because the MAX Pain in the last two days is shifting from 6050 and 6100. So my suggestion would be to Sell the 6100PE-6100CE Pair also.

thanks Raj

 

[healthraj]

Please watch the NIFTY SPOT 6044. As mentioned in the morning since could not move beyond 6096 and also broken the pivot in 30 minute chart 6082 the Short is LIVE now. But now keep a watch on 6044 NIFTY SPOT the pivot in 60 minute chart. NIFTY can move either way from 6044.

NIFTY is Trading around 6060, the RESISTANCE line in 15 minute chart. Only in 15 min chart SHORT was Triggered.

So the important point to note is that We have so many RESISTANCE and Support lines when we are near the Expiry and so do not expect any BIG moves. Better to play 30 points at a time

 

[bapu4]

Can TCS be longed for a target of 2020-40???

 

[babumehta]

For that I need to post the 60 min Chart for you to understand. Right now for 60 min chart to bottom out, NIFTY needs to go below 5940.

Dear Raj, can you post this chart for our understanding?

 

[healthraj]

Can TCS be longed for a target of 2020-40???

Yes looking at the SETUP in OAT, it seems to be a good Trade with Support at 2000, MAX Pain at 2040. So buying above 2000 for a Target of 2040 before expiry seems to be possible.

As per Price movement, TCS is trading above the Pivot line 1995 in 60 min chart. It is in an UP trend from low of 1980. The top seems to 2036 SPOT

 

[healthraj]

Dear Raj, can you post this chart for our understanding?

I will be able post the chart only after the market hours.

 

[healthraj]

AVNY, Looking at the MAX Pain NIFTY Seems to be suggesting that it might expire between 6050 and 6100. Because the MAX Pain in the last two days is shifting from 6050 and 6100. So my suggestion would be to Sell the 6100PE-6100CE Pair also.

Ideally I would have sold 6050PE-6100CE assuming the market would expire between 6050 and 6100

Avny,

Just one small thing. If NIFTY spends too much time now near the 6050-6100, with 3 days left for Expiry, NIFTY like last month can also decide to expire around the support or Resistance. So if the position is in profit better to close. Last month max pain was at 6100 but market expired at 6300 because market spent too much time near 6100.