NIFTY Options Trading by RAJ

[lemondew]

how abt buying a strangle around nifty 7810 thereabouts. If nifty breaks 7780 it goes down else it goes up from here

That is right the Target on the downside could be 7750. To find if the market is directional or Range bound we have to take the Range of the COI and the Range is 300 points.

Now the MAX COI is at 7500-7900. So All in all it says Bearish. Including MAX OI you get an average of 7850. So around 7850, it is a SELL.

Since the MAX OI is at 7800-8200, 7800 acted in the morning as the Initial Support.

Levels as per Chart

LTF - Minor 7794-7813-7833 Major Trend 7785-7833-7890

HTF - Minor Trend 7739-7790-7840 Major 7780-7890-7970

Daily Futures Support @ 7777 (Both Minor and Major).

So NIFTY Futures level 7777 will be the Level to Watch and Trade for

And 7833/40 as per LTF and HTF Minor Trend seems to be Level to SELL for Targets of 7794, 7739.

 

[healthraj]

how abt buying a strangle around nifty 7810 thereabouts. If nifty breaks 7780 it goes down else it goes up from here

From 7750/75 My bias would be UP Looking at the Daily Charts. The MAX OI also points to a 400 point movement on the UP side from 7800. So a Straddle might be worth Buying. ie BUY 7800CE and 7800PE for around 200/205 at 7750/75 SPOT. The Straddle can be bought now also. For any buying in Options it is better to Buy when the VOLT is low. So that way it is better to Wait for some cool off in VIX.

In the Daily Charts the pattern is an expanding triangle. So if there is an UP Move it might be a SHARP move once it crosses 8000. The targets after crossing 8000 is 8200, 8325, 8443

So the Risk reward ratio is more for an UP Move...

 

[healthraj]

So we should sell for targets of 7750 for intraday.

We can expect market to go to 7875 - which again makes it sell @ 7875.

At 7750, if these levels persist, it should be a buy.

Are these conclusions correct ?

Yes that is right. the only change is that since MAX COI has changed to 7500-7900 from 7600-7900, 7875 has become 7850. So the Level to SELL is around 7850 and not 7875.

 

[healthraj]

MAX COI changed to 7700-7900, making 7800 the target / Pivot.

 

[singlap]

So our sell point also now shifts to 7900 raj ?

 

[vikasnp81]

Max coi 7800 - 7900

 

[healthraj]

So our sell point also now shifts to 7900 raj ?

So here is where the Chart comes to Help.
As per the LTF the Resistance is at 7850. So normally at 7850 it is a SELL.
As per HTF the Minor Trend Resistance is at 7850. Unless there is a BO, at 7850 it becomes a SELL. So here is where one needs to make their decision as to what to do at 7850. Options Data indicates a Directional move with COI at 7800-7900. Of course it would make a Safe sell around 7900/25. But what if NIFTY goes down from 7850 ? Options Data does not indicate that. So one has to play by chart...

So if one uses Chart as the primary indicator and looking for Targets, then Options data indicates that 7800 could be the bottom.

So finally the decision is yours .

My view is
SELL around 7850 with a Stoploss of say 30 points and book profits at 7800 and 7775.
Other data for the SELL...
LTF - SELL at 7848
HTF - SELL is in progress 7972. Buy might come around 7775
Daily - SELL is in progress from 8177, BUY might come below 7779 Futures

 

[healthraj]

Max coi 7800 - 7900

So that indicates that there is a directional move in waiting. NIFTY already moved from 7796 to 7850. So either 7900/25 is waiting or 7775 is waiting

 

[singlap]

Thanks raj, But can we say that options data indicates bearish at 7850 and above, so if market touches 7850, we should sell. This is also confirmed by Max COI,

your views please

 

[healthraj]

Thanks raj, But can we say that options data indicates bearish at 7850 and above, so if market touches 7850, we should sell. This is also confirmed by Max COI,

your views please

IF IT IS A PREPARATION FOR REVERSAL then the individual strikes will not give the Right picture. So one can look at the overall Change in OI and the Four Quadrant. Plus there is no square off on the CE Side... For A Reversal the CEs which were sold on Highs need to be squared off. Until then maintain the DOWN bias...

As per the Overall COI it is a SELL.

As per the four quadrant rule SELL is favored 78%.

The Other thing is even though XX50 strikes were introduced and which were supposed to remove the Speculation in NIFTY. The XX50 Strikes are still not fully used (Volumes are low compared to XX00). So the data in XX50 is useless. So from XX00 strikes I can say that 7900 and above is Bearish and 7800 and below is Bullish. I know that does not answer your question on 7850 since there is no Option data to prove that 7850 is Bullish or Bearish.

So what can you do ? You can avoid trading near the XX50 levels and Trade only near XX00 levels.

Note : Please do not ask what is four quadrants. Look at my previous posts I have explained with examples...