Nifty Options Vertical Spread Trading

[pakatil]

Looks like this pull back might stretch up to 5500 - 5550. You might as well get
5400/5300.

Cheers...

 

[ananths]

Nifty not signalling trend reversal yet - firstpost.com

http://www.firstpost.com/economy/ni...-reversal-yet-yes-bank-a-buy-now-1057993.html

 

[ananths]

I was just looking for correct setup to enter spread trade..and thinking of finding out support and resistance would help..

http://www.youtube.com/watch?v=ZmdMD-cMKGE

http://www.youtube.com/watch?v=VtI14AdfOoY

If you guys have any such useful material on finding out Support and Resistance please post it here.

 

[ananths]

Bought Debit spread Sept 5500CE/5600CE @ 168/116

I'm using EMA 5 and EMA 13 to check the direction of the market. SL is around 5460.

 

[ananths]

Covered 5500CE @ 148
Short 5600ce is still open

 

[ananths]

Covered all positions...loss day.
I think its better to avoid playing now until expiry.

 

[TraderRavi]

Covered all positions...loss day.
I think its better to avoid playing now until expiry.

yeah until expiry no trend whipsaw only:annoyed:

 

[pakatil]

Expiry Week, more so on Expiry Day........Mkts are always highly volatile.

Can be easily chopped off or Have Windfall profits........

 

[ananths]

http://www.nseindia.com/live_market...instrument=OPTIDX&symbol=NIFTY&date=29AUG2013

Huge change in OI for 5500PE and IV for all PUTS at around 30 and CALLS at 20's....what does this suggest?

Does that indicate some support at 5500?

 

[ananths]

in debit spread we can reduce the loss...like in this case... 5500pe/5600pe debit spread..if we see mkt going on other side... let it be..
simply sell.. 5400 pe... otms...reverse for calls.
Ex today we entered put with 29 debit spread..if nf move up from support..level means above 5650.. simply sell 5400 pe..and hold on the trade.. and get 10 points on every whipshaw. if mkt range bound you may get .. 40-50 points in a week. without fear of loss.

@Pakatil sir,

Thanks for calling me today and discussing about the spread for Sept.
As you said buying a pair with 20 points price difference makes sense..which is perfect RR ratio..
I will also consider the same for this month and would want to limit the number of trades.
buy 5300PE @ 92 and sell 5200PE @ 70
Max loss = 20 and max profit = 80...i.e 1:4 RR.
Let us see how it opens on Monday.

Thank You! :thumb:

For Sept will combine these two idea's and trade...let us see how it goes..
Thanks to Sanjeev & Pakatil ....:clap:
Since the risk on trade will be around 20 points..it can be covered using sanjeev's method....:thumb: