NIFTY Options Trading by RAJ

[anup]

Raj, everybody seems to be interested in Fish rather than fishing...Sad but its true

 

[new2trade]

Let us know if you have learnt the strategy.

As the Proverb says "Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime"

what I figured out is always sell in pairs of one CE and one PE. But the pair is decided by Max OI and Max pain right ?

 

[healthraj]

from nxt week where we can expect nifty goes lower level of 7200 or 7300+

Right now it is bearish. The Support will come around 7252.

In the Hourly charts the next resistance is at 7395.

So around 7250 I think it would be a BUY

 

[healthraj]

what I figured out is always sell in pairs of one CE and one PE. But the pair is decided by Max OI and Max pain right ?

You are partly right. Please go through the 8 Rules in this thread to understand more. The point is SELLing options does not always give profit. Last August and this Apr/May you would have seen that the IV doubled. There are times when the VOLT goes like rocket, your Option SELLing goes for a Loss. So for the Option SELLing I would look at two important things
- MAX OI to find the pairs - It is asically the Support and Resistance level
- Historic VOLT (from Stock or Futures) / AVG IV of CE and PE (From Options Chain) / INDIA VIX - SELL when the IV / VIX is at the Resistance. Remember you can also plot the India VIX like any other stock and find out the Resistance and Support. So SELL accordingly.

 

[new2trade]

You are partly right. Please go through the 8 Rules in this thread to understand more. The point is SELLing options does not always give profit. Last August and this Apr/May you would have seen that the IV doubled. There are times when the VOLT goes like rocket, your Option SELLing goes for a Loss. So for the Option SELLing I would look at two important things
- MAX OI to find the pairs - It is asically the Support and Resistance level
- Historic VOLT (from Stock or Futures) / AVG IV of CE and PE (From Options Chain) / INDIA VIX - SELL when the IV / VIX is at the Resistance. Remember you can also plot the India VIX like any other stock and find out the Resistance and Support. So SELL accordingly.

Thanks, I will follow those rules By the way since the hourly charts have resistance at 7395, is it a good idea to buy 7400 CE June now considering its cheaper ? Whats a good price to buy 7400 CE June ?

 

[lemondew]

healthRaj,

Great thread. Nifty june volatility is very low. how about a straddle when nifty is around 7250. Offcourse not of the may but the june series. Can we expect sideways movement for a while so that we get lower levels of 7250 straddle friday or monday or is it likely to move soon.

Thanks

 

[healthraj]

Thanks, I will follow those rules By the way since the hourly charts have resistance at 7395, is it a good idea to buy 7400 CE June now considering its cheaper ? Whats a good price to buy 7400 CE June ?

Never buy a OTM Call or the Strike where there is Resistance or Support because those are candidates for SELLING.

For example if as per the Hourly chart if the Support is at 7250 and Resistance at 7395 and if the Bias is UP side, Then the strategy might be

SELL 7200PE/7250PE-7400CE/7450CE

Buy 7300CE / 7350CE

 

[healthraj]

healthRaj,

Great thread. Nifty june volatility is very low. how about a straddle when nifty is around 7250. Offcourse not of the may but the june series. Can we expect sideways movement for a while so that we get lower levels of 7250 straddle friday or monday or is it likely to move soon.

Thanks

I would wait for the BUY signal to BUY. Until then stay on the Short side. In the Daily charts the Signal is SELL. Or otherwise if somebody does not want to Buy, then wait for some Pullback and SELL again at the RESISTANCE.

I do not trade those complex strategies like Straddle or Strangle on NIFTY. In fact the strategy I am suggesting is more like a Strangle. For Straddle you need a QUICK movement coupled with a HIGH Volatility which I think you can apply on the Stock Options. For Index options you don't get so many opportunities. For Any straddle you should be able to predict a big movement. So this can be applied on say before the quarterly Results or a Big event like RBI Policy etc... But I would not suggest to do Straddle on NIFTY. Take a Straddle when the Stock is trading near the PIVOT and you clearly see the Support or Resistance at least 5% away from the Pivot

 

[lemondew]

Selling 7200 and 7500 would give low returns now assuming support/resisitance at 7250 and 7400. Since IV is less. A sudden aniticipation of nifty breaking the bonds without there being any movement can still increase the premiums. In that case a buy would help. But it seems you feel the june series would close between 7250 7400

I would wait for the BUY signal to BUY. Until then stay on the Short side. In the Daily charts the Signal is SELL. Or otherwise if somebody does not want to Buy, then wait for some Pullback and SELL again at the RESISTANCE.

I do not trade those complex strategies like Straddle or Strangle on NIFTY. In fact the strategy I am suggesting is more like a Strangle. For Straddle you need a QUICK movement coupled with a HIGH Volatility which I think you can apply on the Stock Options. For Index options you don't get so many opportunities. For Any straddle you should be able to predict a big movement. So this can be applied on say before the quarterly Results or a Big event like RBI Policy etc... But I would not suggest to do Straddle on NIFTY. Take a Straddle when the Stock is trading near the PIVOT and you clearly see the Support or Resistance at least 5% away from the Pivot

 

[yan]

what do you think about july 8000 ce ,is it gud to be eneter at@20 ,21