Not sure this thread is alive, if not I'll create a separate thread. Basically wanted to discuss ways to trade election results. May option indicate a 650 point swing. Also with vix increasing, any disappointment will be met with exgagerated movement. Previous cases Vix has topped out at 34 leading to a bottom forming out, at current trends this looks to be happening at around 7100-7200 levels. So how do we play, ideally you want to go in with a strangle, but with premiums at a high this is risky, thinking of time delayed strangles, your thoughts are welcome
OT,
Please go ahead and start a new thread. But my view after being away for 30 days is that most of the TJ folks are silent watchers who wants to only GET something FREE and not GIVE anything. If at all you get something back it would be Retrospective information which is of NO use or Some criticisms after you have taken a trade, saying you should not have done this or that or etc.. etc...
Anyways my FREE opinion is as follows.
1. First of all Election result is only around 15-May and so it would be dangerous to go for any strategy which would involve a BUY of Option.
2. As per price action, there is already a SELL in Weekly Future charts around 6830.
3. As per Daily and Monthly Futures charts the RESISTANCE is around 7000. In Monthly the second resistance is at 7700. (So some are hoping for 7700)
4. My current bias is DOWN till 6600
5. The INDIAVIX is trading at the high end of the Spectrum around 32. Anytime we can expect a drop in VIX
So my COSTLY Strategy using MAY-14 Series
SELL 6000-7000 (MAX OI) pair for 280 and buy 6800 PE for around 300. - Net outflow is 20.
6600 will be crucial level to watch.
At current levels, since the SELL is already LIVE from 6830, The TREND Changer is 6740 Futures. If 6740 breaks, then 6600 is the support. If at 6740 or 6600 the Trend changes to UP then close 6800 PE and buy a ATM/ITM CE which would be more or less around 280-300. NEVER BUY A OTM Option. BUY only ATM/ITM even if it is costly. With the VIX @ 30 the OTM Options are definitely going to Loose the premiums in a month. If at all somebody wants to buy OTM option, they should BUY when VIX is around 15.
Safe is to Trade near 7000. Will we get 7000? If you get 6950-7000, then it is a SURE SELL.
I will post the Daily, Weekly and Monthly Future Charts in the evening