NIFTY Options Trading by RAJ

[samwarez]

What is option Pair Trading Strategy?
please help

 

[soumanag]

Hi Raj / Soumanag,

Which pair we can trade for next month? Because I could see for Apr, Max OI is at 8200 - 9000. And Total is 48. Which is way below than 120.

Please guide me.

Thanks..!!
Hardik Shah

Hi Hardik,

It is not proper for me to give any specific recommendation. However following are my observation which might help you.
For next series the OI is at 8200 - 8700 (11:45 IST). The long term trend is showing slight bullishness which IMO may be misleading. If you see my avatar you will know what I think of this market :lol:
Consider that there is substantial PUTS @8500 for April also
Market may remain flat after 27th till 2nd week of April i.e when results start coming out. You may take advantage of this time since short straddle works best in flat market.
Consider that NIFTY 100 DMA @ 8500 & 200 DMA @ 8100 (according to market pundits) so any sustained break below 8500 will cause further pain.
My experience of last expiry is, market will go through sharp adjustments on expiry day which will affect the next series also. The next day may be an adjustment in opposite direction.
I think IVs of all OTM Call Puts are below par for next series which is the reason of such a low price and also explain low VIX. This may correct after expiry
I have decided to take money off the table till 26th. If you are gung-ho about handling the expiry day volatility you may look at a pair with deep OTM PUT & slightly OTM call to reach at the magic figure of 120.

 

[hardik229]

Thank you very much..!!

Hi Hardik,

It is not proper for me to give any specific recommendation. However following are my observation which might help you.
For next series the OI is at 8200 - 8700 (11:45 IST). The long term trend is showing slight bullishness which IMO may be misleading. If you see my avatar you will know what I think of this market :lol:
Consider that there is substantial PUTS @8500 for April also
Market may remain flat after 27th till 2nd week of April i.e when results start coming out. You may take advantage of this time since short straddle works best in flat market.
Consider that NIFTY 100 DMA @ 8500 & 200 DMA @ 8100 (according to market pundits) so any sustained break below 8500 will cause further pain.
My experience of last expiry is, market will go through sharp adjustments on expiry day which will affect the next series also. The next day may be an adjustment in opposite direction.
I think IVs of all OTM Call Puts are below par for next series which is the reason of such a low price and also explain low VIX. This may correct after expiry
I have decided to take money off the table till 26th. If you are gung-ho about handling the expiry day volatility you may look at a pair with deep OTM PUT & slightly OTM call to reach at the magic figure of 120.

 

[anilnegi]

Raj bhai

in your article, you have said the for stock the Max OI is difficult to break, hence one can execute the trade if price near OI, but today yes bank easily break its Max OI of 800, the max OI being 800-820, also max COI is 800-820(bearish though), Pls express your view if i make any wrong decision in taking 800 call

thanks

 

[bunti_k23]

cant say it is bearish ,but range bound.yes bank
if broke 780 and closed below it on daily basis then likely to see 735

 

[soumanag]

Hope all of us survived yesterday's onslaught and my last post helped some of you.

Coming back to present,

Option analysis shows flat bullish pattern for long term ( big joke :lol: ) and bearish day trend.
Kind of Call writing @ 8600 & 8500 we witnessed over last two days, if continued would soon change the trend to Bearish. Any unwinding of puts @ 8300 would trigger a slump and then open up 8200 and even 8000.

Will be watching the 8300 and 8500 OI change very closely. I still stick to my funda regarding finding the pair with deep OTM PUT and slightly OTM CALL unless I see further changes in the OI positions

 

[mohan.sic]

Hope all of us survived yesterday's onslaught and my last post helped some of you.

Coming back to present,

Option analysis shows flat bullish pattern for long term ( big joke :lol: ) and bearish day trend.
Kind of Call writing @ 8600 & 8500 we witnessed over last two days, if continued would soon change the trend to Bearish. Any unwinding of puts @ 8300 would trigger a slump and then open up 8200 and even 8000.

Will be watching the 8300 and 8500 OI change very closely. I still stick to my funda regarding finding the pair with deep OTM PUT and slightly OTM CALL unless I see further changes in the OI positions

How is this post helping in taking any concrete trade decision.

 

[soumanag]

How is this post helping in taking any concrete trade decision.

Hi Mohan,
I never said that my posts are for taking a "concrete trade decision" sorry if I gave that impression primarily because I am not an expert of market (see my disclaimer) and more importantly it is against TJ forum rules to give that impression. I am here to learn and share my experiences. If you are specifically hinting to the 1st line - another member wanted to know my opinion regarding next series pair and I just wanted to hint at a bearish trend in one of my earlier post.
In the end I again reiterate - please do not take "concrete trade decision" based on my posts

 

[ganeshsinghmba]

Hi I have devised strategy that is back-tested successfully. Below is the performance.
Any suggestion?

 

[mohan.sic]

Hi Mohan,
I never said that my posts are for taking a "concrete trade decision" sorry if I gave that impression primarily because I am not an expert of market (see my disclaimer) and more importantly it is against TJ forum rules to give that impression. I am here to learn and share my experiences. If you are specifically hinting to the 1st line - another member wanted to know my opinion regarding next series pair and I just wanted to hint at a bearish trend in one of my earlier post.
In the end I again reiterate - please do not take "concrete trade decision" based on my posts

hi soumnag,

Yes i was hinting to the 1t line.