NIFTY Options Trading by RAJ

[babumehta]

The First chart. As mentioned you can see the Previous Sell Generated at 6122/6113 and Today the initial top was 6112. But no SELL generated in 30 min

In the 6 min Chart you can see the First SELL generated at 6111

Dear Raj, thanks for the useful charts. How are the ranges in the blue calculated? i mean the upper limit and lower limit? does this method work in case of BO or BD?

 

[healthraj]

NIFTY - 29-NOV-13

In the 60 minute chart the RESISTANCE is at 6172 SPOT, Around which it would be a SELL.

Those who want to Buy Naked Options Can buy 6000PE @ 55-60

In the Lower timeframes like 6 and 30 min the First SELL is Triggered around 6169

The MAX Pain is at 6000. So at the Start of the Series, may be it will first test the MAX Pain and Decide the next movement.

Initially just play for 20-30 points may be till 6140-6150 and we might get another opportunity to Short

 

[healthraj]

NIFTY - 29-NOV-13

In the 60 minute chart the RESISTANCE is at 6172 SPOT, Around which it would be a SELL.

Those who want to Buy Naked Options Can buy 6000PE @ 55-60

In the Lower timeframes like 6 and 30 min the First SELL is Triggered around 6169

The MAX Pain is at 6000. So at the Start of the Series, may be it will first test the MAX Pain and Decide the next movement.

Initially just play for 20-30 points may be till 6140-6150 and we might get another opportunity to Short

Since in the 30 minute and 6 minute, Sell is triggered, will be switching to 45 minutes to get the confirmation of a SELL and then 60 minutes...

In the minutes the RESISTANCE is at 6164 and so closing and sustaining above 6164 will trigger a SELL signal.

In the OAT is a Weak Bull with 6200 being bearish and 6100 being Bullish.

From a Positional Trader point of view, since the BUY was taken at 5973, 120 points from 5973 would be 6093 which is already met. 240 points would be 6213. So may be we can wait for 6213 to Take a SAFE SELL Call.

If I break it into 60 points, then it would 5973, 6033, 6093 , 6153, 6213. So may be another BUY opportunity at 6153.

 

[healthraj]

Since in the 30 minute and 6 minute, Sell is triggered, will be switching to 45 minutes to get the confirmation of a SELL and then 60 minutes...

In the minutes the RESISTANCE is at 6164 and so closing and sustaining above 6164 will trigger a SELL signal.

In the OAT is a Weak Bull with 6200 being bearish and 6100 being Bullish.

From a Positional Trader point of view, since the BUY was taken at 5973, 120 points from 5973 would be 6093 which is already met. 240 points would be 6213. So may be we can wait for 6213 to Take a SAFE SELL Call.

If I break it into 60 points, then it would 5973, 6033, 6093 , 6153, 6213. So may be another BUY opportunity at 6153.

Based on the 240 Points, If NIFTY sustains above 6153 then BUY for Target of 6213. Otherwise SELL below 6153.

In 30 minutes I had to change my mind between BUY and SELL all because of the 240 points rule. Let us see if it works:thumb:

 

[premkumartalreja]

Entered the following strategy

Strike Price Instrument Action Quantity Premium
6100 Call Sell 150 209
5850 Put Buy 50 33
5750 Put Buy 150 20
6200 Put Sell 250 127

Investment is 1.6 lakh. Payout as follows

Strike Profit/Loss

5500 -61550
5550 -59050
5600 -56550
5650 -54050
5700 -51550
5750 -49050
5800 -39050
5850 -29050
5900 -16550
5950 -4050
6000 8450
6050 20950
6100 33450
6150 38450
6200 43450
6250 35950
6300 28450
6350 20950
6400 13450
6450 5950
6500 -1550

 

[anup]

Initiated a small sell at 6167, Will close if nifty holds 6180 for few minutes

 

[singlap]

What's the logic ?

Even if you sell 6000 pe and 6400 ce, total premium per combination is 125 x 50 = 6250. for 5 lots it is 31250 and you will not make any loss till 5875 and 6525.

 

[singlap]

What are babamagic break out levels for today ?

 

[premkumartalreja]

Hi Singlap , below is the payout for both. The logic behind my strategy is that payout is higher between 6100 and 6300 where i expect the expiry to happen.ex at 6200 there is a difference of 18 k. also my strategy have sell of 8 lots so less margin.

Strike PC1 PC4
5560 -43750 -26900
5580 -73750 -91900
5600 -68750 -86900
5620 -63750 -81900
5640 -58750 -76900
5660 -53750 -71900
5680 -48750 -66900
5700 -43750 -61900
5720 -38750 -56900
5740 -33750 -51900
5760 -28750 -46900
5780 -23750 -41900
5800 -18750 -36900
5820 -13750 -31900
5840 -8750 -26900
5860 -3750 -21900
5880 1250 -16900
5900 6250 -11900
5920 11250 -6900
5940 16250 -1900
5960 21250 3100
5980 26250 8100
6000 31250 13100
6020 31250 18100
6040 31250 23100
6060 31250 28100
6080 31250 33100
6100 31250 38100
6120 31250 40100
6140 31250 42100
6160 31250 44100
6180 31250 46100
6200 31250 48100
6220 31250 45100
6240 31250 42100
6260 31250 39100
6280 31250 36100
6300 31250 33100
6320 31250 30100
6340 31250 27100
6360 31250 24100
6380 31250 21100
6400 31250 18100
6420 26250 15100
6440 21250 12100
6460 16250 9100
6480 11250 6100
6500 6250 3100
6520 1250 100
6540 -3750 -2900
6560 -8750 -5900
6580 -13750 -8900
6600 -18750 -11900
6620 -23750 -14900
6640 -28750 -17900
6660 -33750 -20900
6680 -38750 -23900
6700 -43750 -26900

 

[healthraj]

Dear Raj, thanks for the useful charts. How are the ranges in the blue calculated? i mean the upper limit and lower limit? does this method work in case of BO or BD?

Hi,

I think I had already explained the logic when I posted the new chart for the first time. Let me explain it again.

Let me take a simple Example.

Let us take 2 Major Pivot Lows, 5973 and 5986
Two Major Pivot Highs 6212 and 6173.

Now the Trend is basically the Average of the above which is 6086. So for now 6086 would be your Trend line or Pivot line. In the Excel there is a Function called TREND to calculate the Trend of a given Set of numbers, which would give you a Straight line.

After finding out the Trend, Calculate the Standard Deviation or Standard Error from the Trend and the four points

6086- 5973 = 113
6086- 5986 = 100
6212 - 6086 = 126
6173 - 6086 = 87

Now calculate the Average of 113, 100, 126, 87. You get 106.

Now Plot a Line of RESISTANCE at 6086 + (106 * 1.20) = 6213
Plot of Line of Support at 6086 - (106 * 1.20) = 5959

Where 1.2 = 1 + FOVOLT of the Stock. For NIFTY the VOLT is around 20% and so I am adding 20% more.

Now If you get above 6213 you can SELL and if you get below 5959 you Can Buy.

I have explained with just four pivots. If you do the same calculation with say 40 Pivots, Your Trend would be little more accurate.

If you notice this is what most the oscillators or the RSI indicators will do. They will Tell you if a stock is oversold or overbought.

One of the most important thing is that I have customized using the FOVOLT of the Stock. So that we capture VOLT and we get a little bit accurate signal