Option Buy Recomendations

[magnanimous]

Dear magnanimous,

Will never prefer option write for newbies. However, one can write calls at R1+200 and puts at S1-200 (Reco. Ratio 2calls : 1 put).

Regards

Hi Mr. Ghosh,

I genuinely appreciate your concern & I wanted to walk in your foot steps....

Best Regards,

Madhav

 

[abigbull]

Option write :
Just wanted to add my experience :
Friday>I had sold a 4200 PUT on 14th : When Nifty was around 4500 at 17Rs
Mon > Nifty was -192pts so the value rose to 51
Tue > Nifty was +77 so it came to 32
Wed > Nifty dived down again and my (write 4200 Put ) got squared off by the system (ICICIDIRECT ) at Rs 37 a loss of 20 pts .
Thrusday > the Nifty was UP around 30 pts
Friday > Today the value of the same is Rs 13 . so cld ve been in profit till today or may be if it wld ve been with me till expiry .

Experts any suggestion for this type of trade where volatility plays a BIG part .. ?also the brokerage is huge Rs 110 for a buy for one lot . how do u boarders trade in option ..any place fro low brokerage . pls recommend .

 

[aditya14]

Option write :
Just wanted to add my experience :
Friday>I had sold a 4200 PUT on 14th : When Nifty was around 4500 at 17Rs
Mon > Nifty was -192pts so the value rose to 51
Tue > Nifty was +77 so it came to 32
Wed > Nifty dived down again and my (write 4200 Put ) got squared off by the system (ICICIDIRECT ) at Rs 37 a loss of 20 pts .
Thrusday > the Nifty was UP around 30 pts
Friday > Today the value of the same is Rs 13 . so cld ve been in profit till today or may be if it wld ve been with me till expiry .

Experts any suggestion for this type of trade where volatility plays a BIG part .. ?also the brokerage is huge Rs 110 for a buy for one lot . how do u boarders trade in option ..any place fro low brokerage . pls recommend .

I was in same situation and incidentally on ICICIDirect.But i sold 4200 Put for 24 .One thing i also noticed was that as the volatility increased the initial square off value was increased(eg earlier it was 4270 increased to 4354).Now what i did was increase the margin on my position to lower the autosquareoff value to 4209.And now i`ll ride this position till thursday itself.

Patience is the name of the Game i have learnt through several battle scars.

 

[aditya14]

Dear magnanimous,

Will never prefer option write for newbies. However, one can write calls at R1+200 and puts at S1-200 (Reco. Ratio 2calls : 1 put).

Regards

Put Writing is a dangerous game.A whiplash like the one we saw post elections and post budget and more recently when Chinese market crashed will take out an option writer.

The only way to play this game is to have hedging strategy in place.Say if u write a 4000 put for september then make sure u have bought 3900 put at same time and if you want more R$ward/risk you can buy 4100 put.Again these are positions which require least attention but reward is less.

 

[terminator_123]

I was in same situation and incidentally on ICICIDirect.But i sold 4200 Put for 24 .One thing i also noticed was that as the volatility increased the initial square off value was increased(eg earlier it was 4270 increased to 4354).Now what i did was increase the margin on my position to lower the autosquareoff value to 4209.And now i`ll ride this position till thursday itself.

Patience is the name of the Game i have learnt through several battle scars.

I had similar experience too
Sold 4200pe, 4600ce strangle for around 119 around 12/13th Aug.
After that 4600ce went into money. Only then I understood that I'm not getting as much juice from my 4200pe (this late realization cost me 40 points ). So I squared it off and shorted 4500pe. After Nifty came down and 4500pe was in the money. I squared off my 4600ce part again and shorted 4400ce which was in the money. I continued this closing my in-profit side all the time till today.
Today I squared off 4500pe, 4300ce taking a 35 point net profit . I held the whole position for around 9 days so 35 points is certainly not worth the effort (though it looked safe all the while to me). But I did learn quite a bit about handling option writing when the underlying keeps moving around in a broad range.
The whole thing was only possible because I had low transaction costs and a tidy margin.

 

[addme_1]

Dear Ghosh ji,

I bought today 5, 4400 Put @ 184 & later 3 puts 4500 @ 218, suggest something. what is your view for next week?

 

[aditya14]

Dear Ghosh ji,

I bought today 5, 4400 Put @ 184 & later 3 puts 4500 @ 218, suggest something. what is your view for next week?

Up bhai.Itne puts ko hedge to karo aap to aatmhatya kar rahe ho.

 

[abigbull]

Terminator
Can u recommend any broking house which has minimum brokerage for options and let also know what is the brokerage we can get for one lot any Call or PUT

 

[ghosh_ak34]

Hi Mr. Ghosh,


Thanx a lot for your prompt response....


I got 1 more query i.e., if market is bearish then instead of buying puts can I sell calls of this month & vice versa??? {as expiry is nearing the price would however goes down, so I thought it this way, but I don't know how far it works}

Cheers.........

Madhav

Dear Madhav,

Next week Aug series seems to be bullish, mainly due to short covering. Will reco. write Nifty aug 4200 put hedge it with Nifty Aug 4800 call write. (Ratio 2 puts Write : 1 call Write)

Regards

Option write :
Just wanted to add my experience :
Friday>I had sold a 4200 PUT on 14th : When Nifty was around 4500 at 17Rs
Mon > Nifty was -192pts so the value rose to 51
Tue > Nifty was +77 so it came to 32
Wed > Nifty dived down again and my (write 4200 Put ) got squared off by the system (ICICIDIRECT ) at Rs 37 a loss of 20 pts .
Thrusday > the Nifty was UP around 30 pts
Friday > Today the value of the same is Rs 13 . so cld ve been in profit till today or may be if it wld ve been with me till expiry .

Experts any suggestion for this type of trade where volatility plays a BIG part .. ?also the brokerage is huge Rs 110 for a buy for one lot . how do u boarders trade in option ..any place fro low brokerage . pls recommend .

Dear Abigbull,

To write options one needs to look at low delta options(less than 0.2 or 0.3) . So, as to reduce risk.

Regards

Put Writing is a dangerous game.A whiplash like the one we saw post elections and post budget and more recently when Chinese market crashed will take out an option writer.

The only way to play this game is to have hedging strategy in place.Say if u write a 4000 put for september then make sure u have bought 3900 put at same time and if you want more R$ward/risk you can buy 4100 put.Again these are positions which require least attention but reward is less.

I had similar experience too
Sold 4200pe, 4600ce strangle for around 119 around 12/13th Aug.
After that 4600ce went into money. Only then I understood that I'm not getting as much juice from my 4200pe (this late realization cost me 40 points ). So I squared it off and shorted 4500pe. After Nifty came down and 4500pe was in the money. I squared off my 4600ce part again and shorted 4400ce which was in the money. I continued this closing my in-profit side all the time till today.
Today I squared off 4500pe, 4300ce taking a 35 point net profit . I held the whole position for around 9 days so 35 points is certainly not worth the effort (though it looked safe all the while to me). But I did learn quite a bit about handling option writing when the underlying keeps moving around in a broad range.
The whole thing was only possible because I had low transaction costs and a tidy margin.

Always hedge your writes as writing is risky. And always square off both the legs simultaneously. Use a option calulator to calculate P/Ls.

Manage your margins properly. Never do over trading. Keep atleast 40-50% of your trading money for managing risks/margins.

Regards

 

[niftytrader2]

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