NIFTY Options Trading by RAJ

[healthraj]

That means BJP is not a Clear winner, which the market was not expecting AAP to win and which also puts a chance of Hung Parliament. So I think it would be bad for market. I would Sell at the Market opening

Booked 60 points profit in the opening Trade on the Short side

 

[premkumartalreja]

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

Finally mt strategy is in Profit today. What worried me is the change in OI 6200 - 6500 call oi down and put OI up. Put writers are writing 6400 and 6500 put. What do you say guys..

 

[healthraj]

As per the Price Action, NIFTY is in an intermediate down Trend with the overall Trend as UP. The VIX is also Low. So if you are going for Pair Trading then I would still go for SELLing a Pair because when the MArket Goes UP, the VIX will not move much. Today VIX is UP by 2.5%. Hopefully if you get NIFTY around 6200-6220 SPOT, then it would be better to go SELLING a Pair.

The MAX OI has also changed from 6000-6400 indicating that we cannot expect more than 6400. So it would be better to SELL the Pair 6100-6450 which is now available around 130. If NIFTY goes further down, you should get 6100PE with a Higher Premium which should be helping if your bias is on the LONG side.

If you can afford more premium and take a little bit of Risk then SELL 6200PE-6450CE Pair

So Even after moving 120+ points the Pair 6100-6450 is at a Profit of 25 points purely due to the VOLATILITY. Book the profit and be at peace. We will get another opportunity.

 

[healthraj]

I don't normally recommend Strangle or Straddle because there is a BIG Risk involved because normally the Strikes for Strangle / Straddle should be chosen as ITM/ATM. There is no big gain of doing Strangle or Straddle with the OTM strikes. But we can always go for a Combination of Credit Spreads and Straddle OR Debit Spreads and Strangle.

For Example since we are expecting the market to move UP. We can do a Combination of

SELLing 6050PE-6450CE or 6100PE-6450CE

And BUY the 6250CE-6250PE as a Straddle, Which is more or less available at the same premium. The Premium as you see would be 268. And if the VIX does not move as expected then both the pair will be at a loss even if the market moves 100 points.

So it is basically a question of how much risk you want to take ?

The 6250PE-6250CE Straddle, Which was closed around 275 on Friday is now trading at 248 all because of a 15% drop in the VOLT in the early morning trade. So even if the ITM/ATM pairs are not able to give a Good profit in Straddle, then think about the OTM pairs. So in a Trader's market, when the market is showing signs of an UP move, it is better to Sell the pair rather than buying.

So the Rule is very simple

When the market is moving up, DO not Buy - SELL the Pairs - Credit Spreads
When the market is moving down, Buy the Pairs - Debit Spreads

 

[healthraj]

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

Finally mt strategy is in Profit today. What worried me is the change in OI 6200 - 6500 call oi down and put OI up. Put writers are writing 6400 and 6500 put. What do you say guys..

For this month, May be 6500 can be Tested. So if your positions are safe near 6500, hold. Otherwise close your positions when it is on Profit and Look for another opportunity.

 

[adg123]

VIX decreases dramatically 14.5%. Market will Reverse anytime. RBI Policy ahead...
I think Its time to buy some PUT (May be PE6300).

 

[healthraj]

VIX decreases dramatically 14.5%. Market will Reverse anytime. RBI Policy ahead...
I think Its time to buy some PUT (May be PE6300).

When is the RBI Policy? Because normally the run upto RBI Policy will be Bullish based on Positive Speculation?

 

[timepass]

When is the RBI Policy? Because normally the run upto RBI Policy will be Bullish based on Positive Speculation?

17th or 18th I think, one day after the FOMC meeting.

 

[adg123]

When is the RBI Policy? Because normally the run upto RBI Policy will be Bullish based on Positive Speculation?

Its 18th December
http://www.rbi.org.in/Scripts/Annualpolicy.aspx

 

[healthraj]

The MAX OI has changed from 6000-6400 to 6200-6400. The MAX Pain remains at 6200. The MAX COI is at 6400-6600. So may there is a Breakout at 6400. So those who are holding the Shorts Please watch 6335-6345. If it breaks, Hold your Shorts, Otherwise Book your shorts and Go Long