Nifty : Real time discussions...!

[bornfree]

deleted as felt not required

 

[bornfree]

Upside: You are always safe. Even if the mkt expires at 5000 you get to pocket 176 points

Downside:Your safety expires at 4892 and you expose yourselves to losing three points for every point drop after that.

"Even if the mkt expires at 5000 you get to pocket 176 points " shouldn't the figure be 117. [201 -100+76-2*30=117]

 

[bornfree]

Guys comment on this..

SELL 4900 Ce at 201
Sell 4900 PE at 76

BUY 2 NF at 5030..

More on this.. Its a bullish strategy..

SL at current time.. NF 5027 level..

@trader.trend : what would be the risk profile before expiry? My understanding is since time value of the option is about 71 rs for CE and 106 for PE for about 18 sessions. Which is effectively to say that CE shall loose 4rs/day and PE shall loose 6Rs/day even if the nifty were to stay constant. Thus any upside movement of nifty from here shall get you richer by 2 points + 10 points for each passing day till the level of 5106 after which it will be 1 point +10 points for each passing day. Thus maximum benefit of 3 points/nifty point is achievable till a level of 5106(on expiry), beyond which it shall be 1point/nifty point.

 

[trader.trends]

"Even if the mkt expires at 5000 you get to pocket 176 points " shouldn't the figure be 117. [201 -100+76-2*30=117]

You are correct.

 

[trader.trends]

@trader.trend : what would be the risk profile before expiry? My understanding is since time value of the option is about 71 rs for CE and 106 for PE for about 18 sessions. Which is effectively to say that CE shall loose 4rs/day and PE shall loose 6Rs/day even if the nifty were to stay constant. Thus any upside movement of nifty from here shall get you richer by 2 points + 10 points for each passing day till the level of 5106 after which it will be 1 point +10 points for each passing day. Thus maximum benefit of 3 points/nifty point is achievable till a level of 5106(on expiry), beyond which it shall be 1point/nifty point.

Bornfree, the theoretical value of time in the options is as calculated by you. It does not deteriorate in the linear fashion that you have written. The market also does not move in a straight line either up or down. If it falls 100 points one day then the options will gain in value. Much also depends on the market sentiment. IF the sentiment is very bearish then the puts will gain value very fast with every fall, even if the strike prices are far away.

When you want to play out these strategies, use options oracle a free software to calculate the payoffs for them. You can get it here:
http://www.samoasky.com/

 

[jallanankit]

Hello guys...

The strategy was a medium term strategy holding a positive bias for bull market days..(not for expiry)... The intention of hedging it was to b a little safe and in turn generate better returns.. Dont think it to be a pure expiry strategy...(one may hold it to expiry considering the 117 points benefit)

 

[bornfree]

Hi, COuld anybody suggest ways to improve your loss taking capabilities(reasonable losses to avoid massive ones). This is one area where i still struggle. I believe ideal way is to train your minds in 1 | 0 fashion just like computers. I struggled for about 30 min to sell my 5100 PE which i had bought @ 180, which i didn't book profit at 140 levels(i guess on day previous to that it had also shown 130 levels). I finally missed the opportunity to close it at par or less and did buy it for 187.50 . Though even this is good to achieve looking at my history of thing.

 

[bornfree]

Bornfree, the theoretical value of time in the options is as calculated by you. It does not deteriorate in the linear fashion that you have written. The market also does not move in a straight line either up or down. If it falls 100 points one day then the options will gain in value. Much also depends on the market sentiment. IF the sentiment is very bearish then the puts will gain value very fast with every fall, even if the strike prices are far away.

When you want to play out these strategies, use options oracle a free software to calculate the payoffs for them. You can get it here:
http://www.samoasky.com/

I would agree with you T.T completely. But i feel good atleast i was correct in drawing an ideal case scenario. Since, it's not too long back that I have decided to 'not to leave trading' and rather put in more effort into learning and get disciplined (after making huge losses), I feel good about every small improvement that i make.

Thanks for your encouraging reply.

 

[jallanankit]

Enter short in 2 NF at 4978

and BUY 5200 CE and 5200 PE at 38 and 258

Market bias: Negative...

 

[bornfree]

Not feeling like trading today. Was up till late yesterday and then missed implementing my strategy as i planned. Would take a break for now and see what Europe brings.