NIFTY Options Trading by RAJ

[healthraj]

Closing the 6400-7000 and 6750CE with 78 points profit.

6400PE-7000CE SOLD @ 245 now trading at 355.
6750CE Bought at 260, now trading at 449.

Entering 6500-7250 Pair @ 259
Long 7050 PE @ 265. Net outflow of 6
NIFTY Futures Made high of 7042, which was our mornig Resistance. So SELL triggered in Daily, Weekly and Monthly charts.

MAX OI is 6400-7000. So 7000 would be a BIG Resistance unless some heavy positions are made by BULLS at 7000PE. the MAX COI today is at 7000-7500. So it might be an indication that BULLS are ready to take this market Further UP. But going by the OI, which is still at 6400-7000, 6400 is also possible now that 7000 is made.... In the Daily chart the move on the last two days seems to be an extortion bar (Move made in a Hurry).

So my bias is DOWN towards 6500 !!! Let us See

SINCE THE VOLT is VERY HIGH There is not much left for a Retail trader because Buying a OTM Call/Put might be risky given the HIGH IV. And Buying a ITM/ATM Put/Call is COSTLY. So the LESS RISKY, Can wait for the Election Results, Wait for the IV to cool down and then ride the Wave...

Even though NIFTY moved up by 60 points, VIX dropped by more than 10% and the positions are in 30 points profit. It is the power of VOLATILITY.

 

[healthraj]

What about selling otm call like 8000?

Is it safe to do this?

You can sell anything above 7700, If you are ready to hold for the month.

In the Futures charts,

Daily charts - RESISTANCE @ 7075 and 7218
Weekly charts - RESISTANCE @ 7042
Monthly charts - RESISTANCE @ 7016, 7729.

So the MAX RESISTANCE is at 7729.

MAX OI @ 6400-7000. MAX COI @ 7000-7500.

So combining OI and COI, one can sell anything above 7500.

 

[healthraj]

You can sell anything above 7700, If you are ready to hold for the month.

In the Futures charts,

Daily charts - RESISTANCE @ 7075 and 7218
Weekly charts - RESISTANCE @ 7042
Monthly charts - RESISTANCE @ 7016, 7729.

So the MAX RESISTANCE is at 7729.

MAX OI @ 6400-7000. MAX COI @ 7000-7500.

So combining OI and COI, one can sell anything above 7500.

MAX COI is now at 6200-7000. From my point of view it is a sign of Bearishness considering that yesterday it was at 7000-7500. VIX dropped to 32 from 39.

 

[prabhsingh]

Buy Hindalco with excellent gains with SL 134.

 

[healthraj]

MAX COI is changing.... MAX OI jumped from 6400-7000 to 6400-7500. So better to wait and watch... But suddenly moving from 7000 to 7500 does not seem fine... So I am Changing my BIAS to Neutral.

 

[timepass]

MAX COI is changing.... MAX OI jumped from 6400-7000 to 6400-7500. So better to wait and watch... But suddenly moving from 7000 to 7500 does not seem fine... So I am Changing my BIAS to Neutral.

Important observation :thumb:

 

[healthraj]

So at 6690 there was a BREAKOUT and so closed the 6750 PE and bought 6750 CE.


Sold the Pair 6400-7000 @ 245, which is now trading at 364.
6750CE bought at 260 is now trading at 415. Net profit of 35 points.

The Resistance is at around 7040, where will switch to Long Puts instead of Long Calls.

Daily Futures - RESISTANCE @ 7040 and 7188
Weekly Futures - RESISTANCE @ 7035
Monthly Futures - RESITANCE @ 7006 and 7718. - SELL Triggered at 7006

So hopefully the correction will start around 7040. So far made high of 7017.5

Will close everything and will go for the following Trades

SELL 6400-7200 Pair around 270. Buy 7000 PE @ 280 - Net outflow will be 10.

Need to Keep a close watch on MAX OI anc COI.
MAX OI @ 6400-7000, which is in line with our Resistance at around 7040.
MAX COI @ 6400-7500 - The 7500 needs to come down to confirm the DOWN move...

The AVG Implied VOLT is at around 46%. And the INDIAVIX is at 39.
So I am hoping the VOLT will come down after the Election results. And THE SELLs might fetch profit rather than LONG Puts or Calls. So it is better to avoid OTM Puts or Calls. If somebody wants to Trade LONG Calls or Puts, Better trade only ITM or ATM. OR Wait for IV to come down. No point trying to trade OTM Puts or Calls now

The AVG VOLT has come down 49 to 36. 20% fall on a single day. The VIX also came down from 39 to 31.5. The FIIs have been selling the Options to hedge their Longs in Futures and Stock .... So I think we will see the VIX going further down. Meaning it is Good to SELL Options and not to BUY Options. With the EXIT Polls setting a High expectation for NDA, I think there will be a negative Surprise if NDA does not get around 270 Seats...

 

[TradeOptions]

The AVG VOLT has come down 49 to 36. 20% fall on a single day. The VIX also came down from 39 to 31.5. The FIIs have been selling the Options to hedge their Longs in Futures and Stock .... So I think we will see the VIX going further down. Meaning it is Good to SELL Options and not to BUY Options. With the EXIT Polls setting a High expectation for NDA, I think there will be a negative Surprise if NDA does not get around 270 Seats...

Suppose NDA just gets around 220 seats and market takes it as a negative surprise and crashes to around 6700 levels, then in that scenario, doen't it makes sense to buy the puts now or around 3 pm on 15 May ? The IV is supposed to jump more and since the nifty will come crashing down, therefor the puts would significantly gain in values. Is there anything that I am missing in this scenario, provided the original assumption of 220 seats come out to be true in the first place ?

What are the risks for such a put option buyer in this case ? Thanks a lot for any views.

PS: Nifty puts have become considerably cheaper in the last 3 sessions because of the huge up move, so for the down bias guys, it looks like to be a good time to take the plunge.

I do not trust the exit polls at all, I have seen them go wrong so many times in the past that there is no reason why I should blindly believe them this time. Indian voters are very hard to predict and these poll experts are not able to include 99 % of them in their servery. So basically they are doing the predictions based on less then 1 % of the voters.

 

[singlap]

Everybody was quite bullish from last few days and after seeing the exit poll results , upmove in the markets was quite expected. But a sudden fall in IVs have changed the scenario totally. Although market has gone up by 150 points, 7500 call has gone down by 10 points.

Since overall game was looking very simple that you just buy calls, IV will go up ,markets will go up and one stands to gain. But market makers or big hands will not allow anybody to make money that easily.
So today , they will surly frustrate all the buyers of options so as to get them out of the market as you cannot remain net buyer when prices are crashing (irrespective of direction of market). Either SLs will be hit or retail investors will close their longs to avoid further losses. After that, again may be from tomorrow onwards, IVs may again start going up and finally some freezes (upside or downside) on 16 th.
Thus in any case becoming net seller can be a dangerous game.

 

[healthraj]

Suppose NDA just gets around 220 seats and market takes it as a negative surprise and crashes to around 6700 levels, then in that scenario, doen't it makes sense to buy the puts now or around 3 pm on 15 May ? The IV is supposed to jump more and since the nifty will come crashing down, therefor the puts would significantly gain in values. Is there anything that I am missing in this scenario, provided the original assumption of 220 seats come out to be true in the first place ?

What are the risks for such a put option buyer in this case ? Thanks a lot for any views.

PS: Nifty puts have become considerably cheaper in the last 3 sessions because of the huge up move, so for the down bias guys, it looks like to be a good time to take the plunge.

I do not trust the exit polls at all, I have seen them go wrong so many times in the past that there is no reason why I should blindly believe them this time. Indian voters are very hard to predict and these poll experts are not able to include 99 % of them in their servery. So basically they are doing the predictions based on less then 1 % of the voters.

Reg. the Election results, I think anything can happen. But I think 270 is way above the Expectation... So I don't want to speculate too much on that...

Technically speaking, ...

MAX OI @ 6400-7500... So from this level both 7500 and 6800 should be possible.

From the Charts
- Hourly charts - Trading above Resistance and triggered a SELL yesterday itself
- Daily charts - The First REsistance of 7080 is crossed today and the Second Resistance is at 7225.
- Weekly Charts - Trading above Second Resistance of 7042 - Sell Triggered on Yesterday itself
- Monthly charts - Trading above the First resistance of 7016. The Second Resistance is at 7730 (Anybody hoping for 7700 ?).

Given the Above My bias was DOWN Yesterday. But since today the MAX OI changed from 6400-7000, to 6400-7500, I am neutral now...

But the important data is next to 7500CE the Next RESISTANCE as per the OI is at 7200CE. So 6400-7500 can anytime become 6400-7200 also.

MAX OI @ 7500CE is 53 Lakhs
MAX OI @ 7200CE is 52 Lakhs

So it is a difference of 1 lakh between 7200 and 7500.

So Risky Can buy Puts now around 7200-25 Futures Level.
MAX OI changing from 7500CE to 7200CE would be another confirmation for PUTs. Otherwise it is safe to stay Long or Stay away.

The Safe Trade now is to SELL the Pair 6400-7500 @ 120.