NIFTY Options Trading by RAJ

[bapu4]

@Bapu

You have mentioned this yesterday in the "Day Trading Futures" thread. Today Tata Steel closed at a level of 389.75. Which chart time frames did you look/consider before you made your buy decision? Ask this your self and answer it to your self.

If the chart not was the reason to buy your puts, then it may was this: Aha, it is cheap, (0.4) so I buy it. Investment is only 120.00 and I can make a fortune if market really falls. If this was the reason then you have done only half of your work. Why? You have to consider the option Greeks and not only the possible fall of the market. As Rockyrobust clearly told: A pure speculative trade and nothing else.

If Tata Steel should be at 299.00 (To become a tiny bit profitable) in 15 days, volatility in the market according to India Vix would need to rise at least 22% from today on. How many times did you experience such a rise in 15 days in the past in India Vix?

Nerveless: If you have in the coming 15 day some money with this absolute speculative trade, take the profit and that's it. Learn to trade in a way the figures/charts and other tools/odds start to be in your favor. If you are able to manage/learn this, then you will be able to survive in option and future trading in the long run. Good luck and be sure that your learning time not runs out of time and of money. I mean, you still can play your little games you did with this option trade, but never start to do it with bigger money until you are really deep in knowledge about what you do in trading. Guess you have deep knowledge in your job, so the same is requested here.

Hi Bro,
Ya I have posted it there but that doesn't mean I can't post it here,I posted it so that it is readily answerable.I considered daily TF for it.The lot being 1000 shares it makes it 400 rs+ brokerge (100)=500/- if it was 120 I wud not have asked you.Secondly TISCO doesn't have to come to 299 for me earning money,I will be happy even if I get 50ps out of it and that I can surely get if it falls to 370 or so which it may tomoro,because scrips generally after result fall how good there result may be,it was 435 at 6350NF so comparatively also It seems over shot then NF at current,now it depends on operators how far they pull it lets see.Secondly Option greeks I know little and like most of the guys can't co-relate because in theory i think it is diff and in practice it astonishes one many times(You can show me if it follws exactly).Any way thanks for guiding.
GBU
P.S. I have seen your posts on Day trading future, so ya you might have seen my post there.

 

[Somatung]

Hi Bro,

Ya I have posted it there but that doesn't mean I can't post it here,I posted it so that it is readily answerable. No problem with that.

I considered daily TF for it. Ok

The lot being 1000 shares it makes it 400 rs+ brokerge (100) =500/- if it was 120 I wud not have asked you. Here we completely mix up. Accepted

Secondly TISCO doesn't have to come to 299 for me earning money,I will be happy even if I get 50ps out of it and that I can surely get if it falls to 370 or so which it may tomoro,because scrips generally after result fall how good there result may be,it was 435 at 6350NF so comparatively also It seems over shot then NF at current,now it depends on operators how far they pull it lets see.

We speak about Tata Steel or did I miss the point or is this the same company for you? I calculated to the last day in case nothing happens. So what you post is a point to consider for a speculative trade. Not my kind of thoughts, but absolute good. No problem with that.

Secondly Option greeks I know little and like most of the guys can't co-relate because in theory i think it is diff and in practice it astonishes one many times(You can show me if it follws exactly).

Different traders, different thoughts and ways of implementing.

Any way thanks for guiding. Welcome
GBU

P.S. I have seen your posts on Day trading future, so ya you might have seen my post there.

Answers are in red in the above comments from you. Now here what I saw: http://www.traderji.com/futures/91950-day-trading-futures-124.html#post934174 and here what you ask for: http://www.traderji.com/trading-diary/88670-nifty-options-trading-raj-429.html#post934495

 

[Option.Trader]

@Option.Trader

I am waiting for your enriching to everyone. As the OI now was discuss for a hounder t/thousand times since the thread started, would appreciate if you now come up with some kind of strategy which was not discussed in the past here in the forum anywhere. Not that I think this thread is out of actuality, just responding to your valuable post. Discussing some thing new really would enrich everyone. Would recommend you to open a new thread and start with it instead jumping around the same place day by day by day by day by day and not do any thing about what you ask for/mention.

Looks like you got up on the wrong side of trade. , yes I do harp on OI as it has given me good returns so far. But it's kinda boring waiting all the time for the trade to play out, so thought of playing with your thoughts. I closed my other thread as this took it to a whole new level, so happy to learn from people's experiences here

 

[bapu4]

Answers are in red in the above comments from you. Now here what I saw: http://www.traderji.com/futures/91950-day-trading-futures-124.html#post934174 and here what you ask for: http://www.traderji.com/trading-diary/88670-nifty-options-trading-raj-429.html#post934495

Hi Bro,
TISCO( Tata Iron and Steel Co) is the old name of TATASTEEL,I am not sure but before 1990-95.

 

[Somatung]

Looks like you got up on the wrong side of trade. , yes I do harp on OI as it has given me good returns so far. But it's kinda boring waiting all the time for the trade to play out, so thought of playing with your thoughts. I closed my other thread as this took it to a whole new level, so happy to learn from people's experiences here

Yeap, looks like it. But never mind as it can happen. So please let;s move on to the next post and sorry about my miss interpreting.

 

[Somatung]

Hi Bro,
TISCO( Tata Iron and Steel Co) is the old name of TATASTEEL,I am not sure but before 1990-95.

At the moment I trade only options on futures and no more any shares or even options on shares. Was once a share speculator outside India (Emergency markets, which even your market is called, and what ever was high speculative, but never did trade on/with Tata Steel shares) and there I did a lot of high speculative trades. Portfolio was at its top 8.3 Mil I. After this I changed to options on futures and here the speculative moment has become quit/very low/different to me. Complete different thoughts/strategies I do/use in this kind of trading.

Thoughts and techniques, which are much more on the save side, even risk is included in different ways, compare to the pure speculative share trades I did a long time ago. But never again I would bet my shirt on any trade, as I did with share trading. By the way: Fun was included in that kind of trading as it was immense exiting to make a touch down from time to time.

Never mind, thanks for your input and Bapu, I really would support you on any more input about your personal plays on options on shares in this thread, what ever they are, as long as the thread owner not has any problem with this If you make any profit with your trade, let us make a party here in the forum about that and other wise let's analyze what was missing at the end to make profit.

 

[bapu4]

Hi Bro,
Party-Sure,Analysis sure.As i told you Tisco has come down to 373 ,but the option has not moved much(it was anticipated),there are lot of puts OI at 370/360/350 so I doubt it will fall beyond 365 lets see.
Fascinated with your resume...

 

[Somatung]

Hi Bro,
Party-Sure,Analysis sure.As i told you Tisco has come down to 373 ,but the option has not moved much(it was anticipated),there are lot of puts OI at 370/360/350 so I doubt it will fall beyond 365 lets see.
Fascinated with your resume...

Hi Bapu

Will make a short resume in an other way today: Option Greeks

I had a look this morning at the situation here: http://www.nseindia.com/live_market...t=OPTSTK&date=-&segmentLink=17&segmentLink=17 Price of the Put 300 FEB @ 0.25. Interesting will be to keep an eye on the IV, which is at the moment @ 55.06. This is quit high. As this is a very far out of the money option, this is normal, as such far otm options in general have highest IV. The point/danger here: Those high IV gives this option also a very high theta (Value on time decay, as this option has no intrinsic value). But as the option get's closer to expiration, this high implied volatility will start to fall. That is an enemy which plays against the holder of such options (If IV falls, value falls too).

So two enemies are clearly spotted: Theta (Time decay) and Vega (Implied Volatility of the option). Those two enemies have to be beaten to make profit at the end of the trade. The other option Greeks have at the moment nearly no influence to the pricing of it. Gamma has little value on this option, as Gamma is related to Delta. And the Delta of this option is very low at the moment.

 

[premkumartalreja]

6000 PE touched 1 Cr OI Today. Looks like this dip was to sell more of the Puts. .

 

[Somatung]

Nifty today @ 6003.10

Update on Nifty short atm call 6050/Feb @ 102.00 and Nifty long itm put 6100/Mar @ 138.90:

Short call 6050/Feb sold on Monday with a good price @ 102.00
Actual today @ 51.05

Action token today:

Hedged the position before market closing with short put 5950/Feb @ 53.40 = Short strangle delta neutral
------------------------

Long itm put 6100/Mar bought with a bad price on Monday @ 138.90
Actual today @ 165.10

Action token today:

Non.

Comment: Time decay played good on the short call Feb series, as there are only 13 days left to expiration. As there is a profit of 50% in the position, the short put was implemented to save those 50%. Position is now price delta neutral and action will be required according to market moves. Best would be a range from 5900 to 6100.

The itm long put has more time to option expiration and time decay is not so heavy as in the Feb series. Still there is a profit of 26.20 (If you wanted to hedge this profit you could have sold the 5600/Mar put at around 26.00)

------------------------

Under watch as Bapu mentioned this idea:

Tata Steel today @ 365.20

Tata Steel put 300/Feb long @ 0.40 with an IV @ 55.06
Actual @ 0.25 with an IV @ 52.52