Option Buy Recomendations

[sameer999]

You just have to be very patient.And besides you can easily hold this and watch tv or whatever just chill.You will collect full premium no doubt.Just hold till expiry.

Inorder to write 1 sep 5200 call at 17 , minimum margin required at 12% = 31,302

Inorder to write 1 sep 4300 put at 20 , minimum margin required at 12 % = 25,920

Total = 57,222

max Profit (premium earned) = 17x50 + 20x50 = 1850 only!

And , this comes with unlimited risk if nifty makes big moves against our direction , also MTM margin need to be adjusted so need for funding more money for MTM to keep the position open.


Whats the use , clearly see , u r investing a capital of arround 60,000 Rs.
and max profit = 1850 Rs.


why u want to take unlimited risk by placin 60,000 Rs. , only to make 1850 ?


Rather one can invest in stocks n take delivery and a profit of 1850 which is hardly 3% of 60,000 , can be made in a few days time , even less than a week.


writing options is always risky and profit is just a fraction of the margin amount placed.

 

[ghosh_ak34]

Dear Friends,

For Nifty Future traders who would like to trade as per trend check strategy posted in 1st post of the thread, Nifty levels for tomorrow are as under:

Resistence at 4851
Support at 4756

If you go short 1 lot then, buy 1 lot at money or near money call and if you go long 1 lot then, buy 1 lot at money or near money put to hedge. Reco. to trade as per trend strategy posted in 1st post of this thread.

Regards

 

[aditya14]

Inorder to write 1 sep 5200 call at 17 , minimum margin required at 12% = 31,302

Inorder to write 1 sep 4300 put at 20 , minimum margin required at 12 % = 25,920

Total = 57,222

max Profit (premium earned) = 17x50 + 20x50 = 1850 only!

And , this comes with unlimited risk if nifty makes big moves against our direction , also MTM margin need to be adjusted so need for funding more money for MTM to keep the position open.


Whats the use , clearly see , u r investing a capital of arround 60,000 Rs.
and max profit = 1850 Rs.


why u want to take unlimited risk by placin 60,000 Rs. , only to make 1850 ?


Rather one can invest in stocks n take delivery and a profit of 1850 which is hardly 3% of 60,000 , can be made in a few days time , even less than a week.


writing options is always risky and profit is just a fraction of the margin amount placed.

Ok you clearly are a novice.It`s not 12% margin that you have to put up.Theres a lot of factors involved like

Whether the option is ITM or OTM.In this case its OTM resulting in less chance of it hitting and hence lower margin.

Also dude i don`t need to tell you since your into stocks that you cannot profit from a downmove.Clearly right now every stock is making money which lead to your statement.But as me and you are not jyotish we cannot predict whether market tomorrow will stay stuck,tank or go up.

Anyways back to the point.I guess the total margin required for what the gentleman mentioned was around 20-22k and a profit of 1750 is nearly 8%.Now as this strategy is very low risk it is very attractive whether your stock moves 10% or goes down by 20%.

And sure lets take your example.Lets say I go in and buy a stock for 60k and you do not see the stock go up rather go down and then stay in a range for a long time.Will you see any profit on that 60k? No.And if you still doubt and want to buy stocks when market is at 19+ P/E multiple then please refer to Circa 2008 crash.

Thats my opinion....

 

[terminator_123]

Hi Ghosh,

How does writing 4 lots of pe4500 of Sep expiry (curr price 24) and hedging with 1 lot of ce 5100 of Oct expiry(Curr price 108) sound ? Could you please explain if there are any better strategies involving ratio spreads of different expiry.

Thanks,
Pavan

 

[DanPickUp]

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[DanPickUp]

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[sameer999]

It`s not 12% margin that you have to put up.

I guess the total margin required for what the gentleman mentioned was around 20-22k and a profit of 1750 is nearly 8%.Thats my opinion....

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even if u calculate margin at 10% ( 8% SPAN + 2% MTM)

total comes out to be 47685 and (not 20-22k according to u), isnt that too much amount placed at risk only to earn 1850!
( beware market can take adverse moves anytime, see what happend at elections, budget etc,)

And thats just 3.87 % ! and not 8% . :rofl::rofl:

 

[aditya14]

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even if u calculate margin at 10% ( 8% SPAN + 2% MTM)

total comes out to be 47685 and (not 20-22k according to u), isnt that too much amount placed at risk only to earn 1850!
( beware market can take adverse moves anytime, see what happend at elections, budget etc,)

And thats just 3.87 % ! and not 8% . :rofl::rofl:

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Are yaar pata nahi aapka kaunsa broker hai? lekin i wrote a 4300 put and a 4900 call earlier this month when market was between 4600-4700.

i paid a total of 23k margin on this position. Aapki calculations se if i take 10% margin then i wud have paid 21500 for 4300 and 24500 for 4900 which is ridiculously wrong.Please calculate the margin requirements as per your broker and post screenshots *********

It`s your opinion and my opinion.Buying stocks is ok if your willing to hold for a long time.Have you ever written a option btw? if yes please tell how ur broker calculates the option pricing?

*********************************** lekin if you adjust the denominator according to your choosing the % return will obviously be different.So yeah 1850 is 8.4% of 22k and not 3.87% as you point out **********

And please give 1 example of lets say what a 5000 call wud require as margin as per your calculation.***************

 

[ghosh_ak34]

Dear Friends,

For Nifty Future traders who would like to trade as per trend check strategy posted in 1st post of the thread, Nifty levels for tomorrow are as under:

Resistence at 4862
Support at 4768

If you go short 1 lot then, buy 1 lot at money or near money call and if you go long 1 lot then, buy 1 lot at money or near money put to hedge. Reco. to trade as per trend strategy posted in 1st post of this thread.

Regards

 

[ghosh_ak34]

Hi Ghosh,

How does writing 4 lots of pe4500 of Sep expiry (curr price 24) and hedging with 1 lot of ce 5100 of Oct expiry(Curr price 108) sound ? Could you please explain if there are any better strategies involving ratio spreads of different expiry.

Thanks,
Pavan

Dear terminator_123,

Are you writing 5100 CA of Oct. series for hedging 4 lots 4500 pe write Sept. series.

If this is so will not reco. this. Will rather prefer to hedge with the option of the same series. May be you can paper trade it and lets see the results.

Yes, near expiry we can write a call of current series and buy a call of next series to hedge.

Regards