NIFTY Options Trading by RAJ

How do you use OAT tool?

  • For Intraday Naked Options trading

    Votes: 58 37.7%
  • For Intraday Pair trading of Options

    Votes: 27 17.5%
  • For Intraday Futures trading

    Votes: 18 11.7%
  • For Positional Naked Options trading

    Votes: 35 22.7%
  • For Positional Pair trading of options

    Votes: 29 18.8%
  • For Positional Futures trading

    Votes: 11 7.1%
  • To trade in Cash market

    Votes: 13 8.4%
  • Overall trading has improved with OAT

    Votes: 27 17.5%
  • Understanding of Options has improved with OAT

    Votes: 57 37.0%

  • Total voters
    154
  • Poll closed .

jagankris

Well-Known Member
Sir Healthraj

You run a wonderful thread here. You share some knowledge about option trading in a very open way and that needs to be valued as: Great. Thanks to you and all the participants in this thread to bring it to what it is today.

Can I ask you one Joe Average question which came up when reading some other posts here?

Selling just one naked option means having a margin of 25'000 INR. If some body now sells 500 naked options, then he has a margin of 12.5 million INR. In this case the max. profit that trader can make would be around 41'000 INR. Considering the risk and the money which is blocked and needed for such kind of ideas, would you consider that as a realistic idea or just some kind of fantasy trades?
500 lots * 25000(margin) = 1.25 crores.
Say one is writing call options @ 80 rs premium - 500 * 50 * 80 = 20 lakhs.
So max profit the trader can make is 20 lakhs not 41,000 rs.
 
500 lots * 25000(margin) = 1.25 crores.
Say one is writing call options @ 80 rs premium - 500 * 50 * 80 = 20 lakhs.
So max profit the trader can make is 20 lakhs not 41,000 rs.
Sir Jagankris

Thanks to clear that as the poster of that specific post did not give any answer to my question which was pointed in the direction of being confused about the numbers in his post. I was thinking about to multiply it with 50, but was not sure if I understood the given numbers the right way.

Now looking at it and comparing the numbers with it under that clear new view has an other value. So thanks to you to take your time to post your comment. Have seen in the past that you are called as a friend of Sir DanPickUp. How is he?
 

jagankris

Well-Known Member
Sir Jagankris

Thanks to clear that as the poster of that specific post did not give any answer to my question which was pointed in the direction of being confused about the numbers in his post. I was thinking about to multiply it with 50, but was not sure if I understood the given numbers the right way.

Now looking at it and comparing the numbers with it under that clear new view has an other value. So thanks to you to take your time to post your comment. Have seen in the past that you are called as a friend of Sir DanPickUp. How is he?
Dan should be fine happily trading his options strategies some where in Alphs :)
 

escape

Well-Known Member
500 lots * 25000(margin) = 1.25 crores.
Say one is writing call options @ 80 rs premium - 500 * 50 * 80 = 20 lakhs.
So max profit the trader can make is 20 lakhs not 41,000 rs.
Hi Jagankris,

Guess figures are wrong, there is mixed up of lot and options.

As per my guess, it should be 500 Options and not 500 Lots.
So fund requirements should be around (500/50) * 25000 = 2,50,000.

Happy Trading.

Regards,
Escape
 
Hi Jagankris,

Guess figures are wrong, there is mixed up of lot and options.

As per my guess, it should be 500 Options and not 500 Lots.
So fund requirements should be around (500/50) * 25000 = 2,50,000.

Happy Trading.

Regards,
Escape
Sir Escape

I guess Sir Premkumartalreja has to clear the whole confusion, as you now also came up with my concerns about the numbers posted.

The answer from Sir JG is fine to me, but if this is not the case and Sir Premkumartalreja talks about 500 options and not about 500 lots of options , then my old questions are up today. Will check the thread tomorrow to see if the answer is posted.
 

healthraj

Well-Known Member
Sir Healthraj

You run a wonderful thread here. You share some knowledge about option trading in a very open way and that needs to be valued as: Great. Thanks to you and all the participants in this thread to bring it to what it is today.

Can I ask you one Joe Average question which came up when reading some other posts here?

Selling just one naked option means having a margin of 25'000 INR. If some body now sells 500 naked options, then he has a margin of 12.5 million INR. In this case the max. profit that trader can make would be around 41'000 INR. Considering the risk and the money which is blocked and needed for such kind of ideas, would you consider that as a realistic idea or just some kind of fantasy trades?
Selling Options is Selling Futures and so you will require the same margin as Futures but if you combine your sell with a Call and Put I think you still require the same amount and your positions are also safe.

One more thing, if you are talking about NIFTY yes you need ~25000 if it is positional trade. If it is a Intraday position you will need only ~10000 margin. In other words you can always take those extra positions during the start of the day and close those extra positions around 3:15 to maximize your profit.

With respect to the profit we definitely cannot compare BUYing and SELLing Options. But if you compare the Risk involved in naked options Selling Options Pair is more safe and worthwhile.

Let us say your capital is 1,00,000 and you want to SEll a Pair of Call and Put

Then as a positional trader you can take ~200 quantities
Let us say you hold the positions for a week and make 25 points you will make around 5000 in a week.

In four weeks you can make around 4*5000 = 20000 = 20% of the capital

Now if you also utilize you intraday margin you can additionally take 300 positions and so ideally your quantity for Intraday would be ~500.

So your max profit per month would 500 * 25 = 12500 * 4 weeks = 50000 = 50% of the Capital.

So the most important thing is to utilize your Intraday margin effectively.

In a low volatile UP market, It is safe and a Good Strategy to make some safe money. When the market is making some WILD DOWN moves, it is better to avoid SELL and go for naked Puts or Debit Spreads
 

healthraj

Well-Known Member
BUY TIME NOW.

All the Major banking Stocks are trading below the SUPPORT and you can buy now including BANKNIFTY as per the Rangebound or SELL HIGH - BUY LOW Rule. But Yes you need to take some risk because somebody can argue that today we had a Breakdown. So decide for yourself.

I am sure it would be the Test of your nerves. But I think Trading is also about the confidence and the Positive Aggression

I am buying ICICIBANK @ 1098 and NIFTY @ 6195.

But it is definitely not the time to SELL. If you want to SELL wait for a Pullback and Sell when the NIFTY is above 6230.
 

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