NIFTY Options Trading by RAJ

[healthraj]

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.

MAX OI has become 6400-7200 from 6400-7500. 7200CE has 61 Lakks. This morning it was 52 lakhs. So may be 7200 could be the top for this Series.

 

[TradeOptions]

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.

Excellent observations singlap :clap:

Infact even after around 100 points gain in Nifty, the 7000 call is almost flat with no gains and calls above that strike "like 7100,7200,7300 etc." are in red !

On the put side, the puts below 6500 have all crashed by more then 50 %, thereby making them even cheaper for the bearish view guys. I am waiting to grab some, before 16 May.

 

[parmit]

raj sir, wht is role VIX index in option trading

 

[anup]

Anybody knows what is the current VIX value now

 

[gmt900]

32.76 at 10.28 am

 

[singlap]

IVs have gone up from yesterday on expected lines. Whether these IVs peak today or tomorrow afternoon is anybody's guess. Some more increase in IVs from here will definitely give a good shorting opportunity.
Any levels for today please ..

 

[healthraj]

Anybody knows what is the current VIX value now

Option value is calculated based on the below parameters
- Underlying price of the Stock
- Strike price
- Time to Expiry
- Interest Rate (Right now it is assumed as 10%)
- Volatility
- Dividend

Time to expiry does not move rapidly
Interest rate is constant
Dividend also is a constant or known value
The only parameter which could drastically change the value of the option is the Unerlying price or the Volatility.

 

[healthraj]

Election Day trading

This is just a Technical view on how the Election trading should play out.

Based on MAX OI in May-14 : Range is 6400-7500. Looking at the MAX COI of 6400-7800, the Top seems to be 7250.

Based on MAX OI in Jun-14 : Range is 6800-7500. Looking at the MAX COI of 6700-8000, the Top seems to be 7350.


Hourly SPOT Charts : The Range looks like 6800-7300.

Daily Future Charts : Range is 6617 to 7277. Right now trading around the R1 @ 7133.


Weekly Future Charts : Range from 5838 to 7056. With Pivot at 6447. SELL Triggered above 7056

Monthly Future Charts : Pivot at 6133. R1 @ 7024 - SELL Triggered above 7024. R2 @ 7740.


Summing up everything above...

SELL Near 7275/7300 for Target of 7050 / 6800.

Options Trading - SELL the Pair 6800-7500 in Jun-14 Series or 6500-7500 in MAY-14 Series

Note : As I finished typing the MAX OI once again moved to 6400-7200 from 6400-7500. So to me it seems to be Good bet to Go Short around 7200-7250 SPOT for Target of 7000 and 6800.

Instead of Trading naked, When the NIFTY is around 7200/50,

SELL The PAIR 6500-7500 and Buy a PUT whose price is slightly above the combined premium of 6500-7500.

Those Who want to Try a Stock like SBIN.

The VOLT is almost double. So good for Shorting. SELL THE PAIR 2000-2400 or 2100-2400. The VOLT is around 65 today. Tomorrow it might come down to around 35/40. You can also Buy Puts when SBIN is near The Resistance 0f 2270/2300.

Whatever it might be the profit is in SELLING Options since the VOLT of the Stocks have shot up like anything

For example

SBIN - From 35 to 70
ICICIBANK - From 40 to 65
AXISBANK - From 35 to 65

 

[prabhsingh]

Option value is calculated based on the below parameters
- Underlying price of the Stock
- Strike price
- Time to Expiry
- Interest Rate (Right now it is assumed as 10%)
- Volatility
- Dividend

Time to expiry does not move rapidly
Interest rate is constant
Dividend also is a constant or known value
The only parameter which could drastically change the value of the option is the Unerlying price or the Volatility.

When you sayi Underlying price,do you mean Spot price or Future price.Does Future price plays any role in calculating opton price?

 

[healthraj]

When you sayi Underlying price,do you mean Spot price or Future price.Does Future price plays any role in calculating opton price?

The underlying is always the Primary instrument which is the Stock and not the Futures.
I do not think the Futures Price has any role to do with the Options Price.